God forbid C-level compensation and Wall Street greed might be impacted by COVID-19 and wary consumers holding off on discretionary purchases.
21
Trump doesn't have anyone to call names or to sue. What to do? His default options are gone. You can't sue a virus. Yes, right, the Fed. This is The Coyote pulling out a box of Acme dynamite.
1
Market takes a Biden bounce today.
1
Will rate cuts help in recovery efforts of public people’s health with Corona outbreaks ya lost productivity due to more people failing to show up for work? Government need to get out of market manipulating tactics for political purposes like wining elections. Let markets play out on their own fundamentals which are based upon manipulations and psychic behaviors than true values.
What Trump will do now is shut down the government, taking all the money saved to put in the stock market to save that. The only government operation he won't shut down is the border wall funding because that and the stock market are the only two things he cares about besides himself.
2
What we are seeing in the markets is a lack of confidence in the Trump Administration’s ability to manage anything.
4
made my CDs skyrocket. I might have to sell them to raise money to buy into the recovery.
If sales decline because people are not buying because they are sick and if businesses cannot produce products because they can't get raw materials, how in the world does reducing interest rates make a difference?
4
It won't make the coronavirus go away.
2
This large and sudden drop in interest rates looks like exactly what it is, a futile and no doubt ineffective attempt to prop up the economy and make Trump look like he is doing a good job.
The stock market is dropping because consumers and investors are concerned about the almost inevitable hit the world economy is going to take from supply and consumption disruptions caused by the coronavirus. Seeing the fed desperately dropping interest rates does not reassure anyone, in fact it highlights the fed's fear of a recession.
1
The falling stock market and lack of medical treatment accessible to all US residents in view of the Corona virus worldwide epidemIc are the best "medicine" to prevent re-election of DJT. "Let's see what happens" and labeling unfavorable events as "fake news "or "a hoax" ensure the failure of the so-called "policies" of the POTUS and his henchmen. To save democratic government in the US, mass bi-partison demonstrations may be the only way to force him to resign. His recent demand that his appointees sign declarations of PERSONAL LOYALTY to him is a red light warning that that should be deemed a clear and present danger to Republican members of the Senate and House of Representatives. The time has come for them to wake up.
3
You can't vaccinate the economy from market corrections, but you can vaccinate people from disease. Anti-vaxxers, conservatives, and other denialists will find out what a pandemic does to their way of life sooner or later.
2
It's the election. BIG Money interests at work to keep Republicans in power.
So Wall Street reacted negatively to The Fed's (or was it Trump's) panic rate cut. No real surprise here. Wall Street wants well thought out responses that have a viable step 2 if needed. I'm sure that the Traders, like most THINKING people, want a realistic response to Covid-19 based upon Science and not Trump's personal finances.
5
The media hype over the dangers of the coronavirus has much more dangerous consequences than the virus itself. I am a Professor of Medical Genetics. There are numerous unexplained cases of coronavirus in the US and elsewhere. This raises the possibility that the Coronavirus was for a long time indigenous to humans. I suspect that as for now population wide screening will show that in every country a certain % of the population are corona virus carriers.
Very informative are 2 recent medical articles in The Atlantic 1. You’re Likely to Get the Coronavirus Most cases are not life-threatening, which is also what makes the virus a historic challenge to contain.JAMES HAMBLIN FEBRUARY 24,. Professor Lipsitch a Harvard epidemiologist says that with in the coming year, some 40 to 70 percent of people around the world will be infected with the virus ,and It’s likely that many will have mild disease, or may be asymptomatic. The emerging consensus among epidemiologists is that the most likely outcome of this outbreak is a new seasonal disease”2. The Coronavirus Is No 1918 Pandemic The differences between the global response to the Great Flu Pandemic and today’s COVID-19 outbreak could not be more striking. MARCH 3, 2020
1
Fed's monerary easing stance of interest rate cut in the absence of fresh investment, productivity improvement, and commensurate fiscal policy measures could only be counterproductive least of all an antidote to the fast spreading menace of the coronavirus and its slowdown impact on the economy.
1
The Federal Reserve should have its name changed to the "Board of Oligarchs". Certainly, its antics represent the zenith of Insider Trading Opportunity creation.
This time, they may have really "put their foot in it", since the Dow is a leading indicator of economic activity; it's not a trailing indicator, as many people believe.
But it's only fair that the Bankers should be able to stuff some money in their pockets, since they have to give so much of it to our politicians.
4
Trump: "Help, Fed, the market is killing me." Fed: "Here's half a percent." Market: quick deep breath before another deep dive. Moral of the story: he claimed it going up, he owns it going down. (Forget interest diddles; maybe a little truth-telling that aligned with science and reality might have mitigated the plunge a bit.)
6
The American people can rest assured that the punctiliously truthful Casino bankruptee is thinking only of their welfare during the hoax pandemic.
He is less like the caring father of the nation than the dodgy uncle of the nation. I saw his ranting rally the other night. His low growling grievance-venting reminded me of Linda Blair's performance in The Exorcist. I almost expected his doormat crowned big head to do a full rotation.
9
The Fed can't calm the markets because the markets know that Trump is incompetent and ignorant.
10
With Sanders out of the race the market will do fine. Biden was always a reliable friend of the banking and finance industry. For the last few decades that has been a major source of GDP growth we can anticipate more. In addition now that the health care industry is going to be saved that is another source of continued growth in our economy. Bank and healthcare stocks should do well in the coming weeks. I see a bright outlook for defense stocks as well in view of the Russian threat. Thank you African Americans for sticking a fork in Sanders and saving our investment accounts.
1
When we demand Medicare for all, they say “that’s socialism!” But when the stock market hits a rough patch...
That’s different though, say those smart fellows. Not socialism at all.
9
The Fed is just rewarding spoiled children on Wall Street. These clowns will never be happy no matter the drop in interest rates. They are like swarming sharks after any scraps left from the feeding and about to turn on each other.
What has a lot better chance of working is a QE of say $50-75B/yr for the next 5 years to fund infrastructure projects rather than reward spoiled brats. At least the results would improve the deplorable state of our roads, hospitals, schools, water treatment and distribution and waste treatment/managment.
3
So Mnuchin says we will help business if they need support. I guess that means cash disbursements like the billions to farmers.
5
In China, all treatments and hospital stays for all of the over 70,000 Coronavirus patients are all payed for by the Chinese government, even all the meals are free. The whole county is supporting Wuhan with food donations and volunteering doctors and nurses from all other provinces. What Sanders is suggesting, China has already long been offering to its citizens. China need to change and learn from the Singapore government and economic model. What a shame, all these talents and hard-working people, their outdated one party government will always drag themselves down in the world stage no matter what Xi does for the people. China will always be a hated outsider no matter what. Poor and weak, you get exploited and invaded; strong and determined, you get jealousy and hatred. Maybe it takes a bully and combat a bully.
Do we any longer have sound sector statistics on the economy, banking, and finance?
These lower interest rates, it seems to me, support unsold inventory and cancelled sales. So, should Boeing and its numerous suppliers suffer cancelled orders for planes and parts, they can continue to produce at same cost against expected sales recovery.
But, credit-worthiness of small is weakened during threatened recessions and small businesses get little of the benefit from this interest rate reduction.
A gift to Trump donors. The rest of us suffer as we try to save. Under Regan we were at 9%. Now we can't give money away and the new GOP love deficit spending more than Regan. What gives?
3
Why does the Fed think it can subdue the economic damage of a pandemic by throwing money at it? Let the medical folks tame this thing, then the Fed can apply some stimulation. The Fed has limited bullets to use and right now they are wasting them on bogus targets.
4
“We do recognize that a rate cut cannot reduce the rate of infection, it won’t fix a broken supply chain,”
Yes, that and the fact that the damages caused by the Great Bush Recession linger, the Fed has not been able to reduce its balance sheet, assets that it has accumulated to fight the Great Bush Recession weights heavily in its ledger.
How much? This much:
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
The Fed has limited fire power!
However we do have a reassurance from #45 that
“We have it totally under control, it’s one person coming in from China, and we have it under control.”
https://thehill.com/homenews/administration/479301-trump-says-us-has-coronavirus-totally-under-control
6
Who is going to pay for the massive health care bills associated with this epidemic?
4
I'm trying to understand how cutting interest rates will help workers who have the virus get back to work.
I am wondering how allowing companies to borrow money cheaper will get more people tested.
I'm asking how stock markets will help subsidize the people who have huge bills to pay after a 15 day quarentine.
And how will seriously infected people cover the cost of respirators if they are not insured.
I'm asking the stable genius and his merry band of sycophants.
12
If Janet Yellen or Bernanke were in charge, they would not have made such a stupid mistake of spooking the markets with a gigantic 0.5% rate cut----it would have been 0.15% and the market would not panic over the potential severity of the coronavirus pandemic ( that is what it is now, and we are not getting the full grim story out of China or Iran). We could now have a financial crisis with no leverage to end it with the incompetence of the Trump administration.
6
No one from the Trump's administration will stand up to him. This is the main criterion according to which they were chosen.The democracy in the US is brain dead, and if he is reelected in November , only dear God is remained to save not only the US.
5
"But Mr. Pence said the federal government did not intend to dictate school or office closings, saying that “these decisions are best made at the state and local level.” This is an absolutely disastrous policy. Uneven (at best) measures implemented by local mayors, governors, CEOs, churches and schools to limit social mixing will not slow the spread of this virus at all. Policy and leadership must come from the federal level and they have to take dramatic actions to get at least two weeks ahead of this, not just respond to daily headlines and case counts.
3
Fait accompli to jawboning, and to escape scapegoating via twitter otherwise.
This is for the 0.01%.
5
I have to wonder how the AMA feels about the Fed "protecting the economy from the coronavirus," as that really seems like a medical thing.
3
I'm amazed at so many people who think they are experts on Fed policy, when in reality they know very little.
The cut in fed funds rate was linked to problems in bank liquidity which sometimes shows up in the repo-markets. Specifically, as people draw down their deposits to hoard cash or hoard groceries(use of cash), this causes liquidity problems for banks. Similarly as markets drop, trading firms need cash to prop up their money losing positions, i.e. sell bonds over night to get cash in the repo market causing banks to have in tern to have large unexpected cash needs.
This may also be tied to banks/brokers/hedge funds having liquidity problems as people pull out their cash such as at Robinhood. (a run on the bank) - This is an educated guess.
@Peter
I'm neither an economist nor an expert on the Fed so please forgive my ignorant questions.
How can there be a shortage of cash when the velocity of the M2 money supply is at historic lows? If cash/equivalents are not circulating through the system - as is presently the case - doesn't this mean that there are fewer transactions and thus a large supply of money?
4
@Gp Capt Mandrake
This is not about M2 or velocity of money, but really about how banks manage their cash reserves as required by the Fed and banking laws. Banks are required to have so much cash on hand/reserve. The major ones i.e JPMorgan are required to have much more due their size. Management of cash is done via the repo market.
In the past year the repo market has been a bit dysfunctional causing the Fed to step in.
ref: https://www.nytimes.com/2019/09/18/business/fed-repo-rates.html
@Gp Capt Mandrake
And why did Powell resist doing it initially?
I don't follow the Fed Reserve Board's logic in making this interest rate cut. Bond rates are falling. I don't see how it could possible help the economy in the areas that they are responsible for in their charter. The coronavirus is not subject to economic manipulation. How is consumer demand and employment going to be changed? How will the inflation rate be changed?
4
@Bob The upright Mr Trump who has illegally paid $130,000 to Stormy and then lied about it, should release his taxes NOW. This is in order to reassure the American public, that this has nothing to do with benefitting Trump who has huge loans with Deutsche bank - said to be linked to Sberbank. Why did the honourable Donald Trump put so much pressure on Powell?
(Sberbank. Sberbank (SBER) was founded in 1841 in Moscow, and it has always been a joint publicly owned and government-owned institution. The Central Bank of Russia owns 50% of SBER plus one share, and public investors the rest. Sberbank employs about 293,000 people and has about $440 billion in assets.Jun 25, 2019.)
It might be of interest to the American public if the interest rates on these huge loans that he has hidden from them, are being kept low to assist his repayments to Russians with whom he says there was NO COLLUSION. Remember Mueller did not even get to the financials when AG Barr curtailed the investigation.
1
Why is the Fed cutting interest rates during ‘the greatest economy in history’?
20
I'm waiting here in San Diego for the late night results to come in here in California and, earlier, in Texas. Bernie Sanders promises to have big wins in both states. He just won Colorado. Yet, because he is not in the pocket of the "bigs" (pharmaceutical companies, Big Ag, Big Oil, Big Health Care Insurance, etc), the "establishment" is throwing in for Biden.
Where are the principles of the Democratic Party - they who talk a good game until the chips are down, as now.
The market may go up or down, the virus may be here soon, but the planet is burning up and climate and war refugees are desperate. Why don't the real issues get the ink?
7
A rate cut won’t put people back in offices, schools, theatres, stores, hotels. It won’t spur more travel, or reverse the psychological impact of an epidemic on consumers. The markets read the rate cut for what it is: a signal the Fed knows this is bad and is driven to do something — despite the fact there really is little it can do that will be effective, especially when interest rates are already low, we have had a huge tax cut stimulus and an exploding federal deficit to match.
A rate cut may help stop a free falling securities market. It won’t significantly alter the effect an epidemic will have on productivity and consumer demand. It won’t fix the disruption in supply chains because of travel bans and quarantines abroad.
It’s a popgun brandished at an oncoming armored tank.
8
The markets are reassured, because nothing quite says "relax, everything's under control" like an "emergency rate cut".
The wrong prescription for the ailment, as many have pointed out. Supply chain shock and demand shortfalls don't require new business investment, and there's no real shortage of affordable capital already anyway. Just who is supposed to be helped out by this?
9
@ Jim Brokaw, debtors with variable interest rates tied to the prime rate wil be helped, which is just fine isn't it? even if that does not affect a lot of the investor class? Not as though a lot of attention has really been paid to much of their debt situation, whether some of them have figured that out yet or not.
1
@Jim Brokaw
Well, I've been dawdling about refinancing what's left on my mortgage... I think I'll get on that this week.
@SW Gringa -- Good thought. I'm sure "The King of Debt" appreciates the lower rates, too. Just coincidence, I'm sure.
1
And when the Trump Recession hits, what tools are left for the Fed to fight it? None. The quiver is empty.
17
When all else fails and the politicians have no more lies to offer...Create a Task Force.
OH LOOK... According to Treasury Secretary Steven Mnuchin, "The Treasury Department has created a task force to develop stimulus proposals, should additional efforts be needed, he said, adding that he was looking at ways to help businesses if they needed support."
How about spending some money on health related strategies for dealing with an international health crisis. How about restoring funding for the Health Agencies that you geniuses de-funded because they were crated by President Obama.
How about letting some Health Experts take over the coordination of this Health Crisis.
11
Perhaps someone could explain to me how reducing interest rates now will help during this crisis, since wealth is lost when production, distribution and purchase decline. This is not a financial crisis like the big recession when capital liquidity was the problem, caused by hidden debt in one sector.
9
Lowest rates since 1932. What does that say about the economy?
17
Trump continues to show that he is either willfully ignorant, or actually ignorant. He views the stock market as a kind of personal approval poll. Any student in Finance 101 knows that the stock market operates according to its own logic. The market doesn't care who is in the White House. Trump continues to spread this insidious myth, and he will do so in the 2020 election campaign. How many times has he said that if people vote for a Democrat, the stock market will tank? Ridiculous. He is in the White House and the market is tanking. He further thinks that if he screams at Powell enough, the FED will lower interest rates, and THAT will cause the market to rise (and Trump will take the credit).
Trump is a deeply dangerous man. His fantasies, paranoia, and lack of regard for the American people is criminal. We must rid ourselves of him or we are doomed.
28
@William O, Beeman
Nicely put, William. I vote for both willfully and actually ignorant. I don't see any evidence to the contrary, unfortunately for all of us.
2
Trump says the virus will disappear soon.
The Fed does a one-time cut not done since 2008.
????
10
@jhanzel
You're thinking. Thanks for that!
2
FYI, Dr. Fauchi is not Director of CDC. He is head of NIH, National Institute of Allergies and Infectous Diseases.
1
How fun to realize Trump's parading in his underwear is finally visible to all ...even the dimly visioned backers of his MAGA sycophants. just a little tragic considering what the consequences are going to be.
San Quentin waits.
11
Unfortunately San Quentin is a California State Prison, not a federal prison. Might I suggest Leavenworth, in Kansas? Or, if you want him as far away from Washington DC and New York, as possible, it would be Victorville, Atwater, or Lompoc, in California, as Hawaii, Alaska, Oregon, and Washington (state) have no federal penitentiaries (the high security prisons). There is one federal correctional facility in Oregon if you are willing to go with medium to low security federal facilities.
1
Asked if political pressure fueled the cut, Mr. Powell said that in making decisions, he and his colleagues were “never going to consider any political considerations whatsoever.”
And with that, Powell proved to be just another lying stooge of Putin's. We might die of Trump/Pence's COVFEFE-19, or just grind to a halt. No wonder the market went down! There is no legal way to rid the US of this Russian monkey on our backs.
8
Poodle Powell actually heeded his masters' voice.
First:
According the Dean of the Trump University School of Epidemiology,
a half point drop in interest rates will immunize the states that provided Mr. Trump with electoral votes. It's in all the medical journals.
Second:
Using an immunological excuse, Poodle bolsters the Trump Economic Miracle.
Good doggie.
10
2020: the year of the Trump Slump.
8
Economy Trumped, corona will cure itself, good grief
3
What so many of us miss is that China and much of Asia is the factory {supplier} of the world. When they sneeze, we all get sick. Sorry, but the truth hurts. Try to buy something in Walmart in a couple of weeks. Good luck.
6
So relieved that trump appointed a man who rejects science and doesn't even believe in evolution to manage this crisis - shouldn't that put the markets at ease?
This is what we get with conservative "starve the beast" economics: a government that cant even protect it's own people.
10
Trumpenomics is the practice of borrowing as much money as you can sucker a lender out of, and then walking away when it all falls down. This economy will fall hard, it's only a matter of when. Better it happens in 2020 than 2021 or later. Maybe we can get rid of the cause before he goes on to destroy everything else we have worked for over 200 years to accomplish.
7
I'm really disappointed the administration is pushing a dog-and-pony show to drum up a false narrative, one that says monetary policy cannot help contain the virus. Because it most definitely can assist to contain it, by moving interest rates to help people get mortgage loans, transportation, and the financial value that helps people stay stable.. Or would we rather have only the option for people to double-and triple up in one bedroom apartments, or worse. The Fed and the Trump administration, embarressingly, believe the public consists of people who cannot possibly understand their importance. And the parasite CEO investors continue to dump currency into Treasury Bonds. They do this because they don't give a hoot about anybody but themselves. They don't care, except insofar as they can save their money on the backs of everybody else. Nevermind dumping currency into bonds just makes it harder for regular people to acquire the same benefits enjoyed by the barons of finance. So spare me the phony narrative, as I know with some certainty that its all crocodile tears coming from the Trump and big investors. The Fed needs to put a halt that immoral behavior.
2
Too bad he kow-towed to Mr Trump and kept rates low. Now he had no fire power when we need it.
3
One moment lets remember the picture when Trump took over economy from Obama.
US economy has been recovering worst crisis since 1929. EU has just been out of the woods or not , China has been signaling slowing down its economic growth.
Trump as his class brat boys, he felt , he is going to spend his fathers money. He would like to play world economy tariff hike , with no deep study, or expert consensus.
In short he was president, he can do whatever he wishes ( he said many times this words).
What now? the most unexpected happened? A viral pandemic ?
Playing world delicate economical balances , oh yeah that was a great idea.
MAGA let us win so much, I am tired.
5
In response to Trump tweets the FED never raised rates enough when it should have to save for a rainy day. Now the underpaid tiny insurance policy is almost all gone. Is the US ready for the possibility of negative rates and austerity measures? Are we winning yet?
PS: The only folks who win with rates this low are those with mad cash on hand to buy up the next round of foreclosures after the public companies cut jobs because they can’t afford them with stock value down. I guess they could use all that repatriated tax break money, but that didn’t turn up as raises before so somehow I doubt it will come into play now in any way beneficial to the average worker.
1
This is a supply problem. Not demand. Cutting rates by the Fed will not help supply.
It would be better for most households if the federal government gave all families a case of SPAM.
4
What are Trump supporters to do? They echo claims that the corona virus is a hoax and that nobody should panic; they cheer the Fed as it panics and precipitously drops rates; they boo when the Fed panic they cheered this morning causes investors to panic by lunch.
Maybe it's time for Trump and his fans to stop assessing everything based on what will help Trump politically that day. Contagion and markets are not impressed.
12
When Federal Reserve cut interest rates outside a scheduled meeting, they officially acknowledged that coronavirus is a serious threat.
In any case, the key impact of this virus is disruption of global supply chain. The Fed does not have tools to directly address this problem.
Fed confirmed a problem it cannot solve. Markets were bound to fall.
9
@NG "Fed confirmed a problem it cannot solve. Markets were bound to fall."
Perceptive summary.
2
Stock market corrections and economic recessions are not the end of the world. They are often healthy and necessary to reset the markets and the economy. Investors and the general public seem prone to panic these days. Continually trying to overstimulate the markets and the economy is not good policy. We are going into uncharted territory. And the new Fed candidates that Trump is proposing are unqualified as are many of his appointments. This cannot bode well for our economy or the country.
7
The Feds slashed interest rates because of the REPO market!!!!
Not so much because of C-19.
The overnight lending market is out of whack. There is/are a bad bank(s) out there. That's why Powell cut rates with no notice. That's why the markets tanked immediately after he cuts rates. Something has gone wrong in paradise. Overnight lending is in trouble just at the wrong time when C-19 is likely to spread. This is reminiscent of the conditions that led to the 2008 market crash.
4
And now what is the Fed going to do when the economy really tanks? Obviously a political response to the Don.
11
The coronavirus is a global public health crisis. And a human tragedy.
Why is the Fed cutting interest rates? From already historically low levels?
Money and interest rates have nothing to do with this crisis. Nobody is going to make any economic or business decisions because interest rates are now 1.00% instead of 1.50%.
Sure, the economy and some businesses will suffer due to this pandemic. But the answer does not lie in the financial markets. Rather, the answer depends on effective public policy responses to effectively contain and counter this health crisis.
17
The trump correction, the coronavirus, will eventually let the market settle where it should have been all along. Trump goosed up the economy with tax cuts, deregulation, and manipulation of the fed. It didn't work for long. A false economy to be sure. The chickens have come home to roost. See ya Don.
17
Half a point will not assuage Trump, who is after negative interest rates.
Half a point *will* scare people into thinking the economy is worse than it is.
4
Yet again it's time for a Democrat to take the reins and fix the financial mess left by another Republican president. Sigh.
22
A novel approach for a novel virus.
Fight Covid-19 with lower interest rates.
The virus doesn’t care.
The stock market is down almost 2% so it doesn’t care.
The only things for sure are the spread of the virus and the lower confidence in trump.
A 1/2% cut didn’t move the market up. Cut more he screams via tweet.
trump is using the wrong weapon and he’s going to run out of ammo with the rate at 1% now.
Back to the drawing board prez. Maybe you should delegate finding a solution to some REAL experts, which excludes pence.
This is the time for leaders to stand up. It’s not the time to hide behind scapegoats.
9
Slightly off point, I know, but quick a question: Are jailbirds allowed to wear instant tan in the States? I presume that sunbeds are off limits.
8
So the race is on, can Trump bully the Feds to artificially float the economy to election day?
I picture yet another drive into a ditch, a democrat takes the White House with the Republicans screaming into every microphone they see on how none of this is their fault and the (D) is doing it all wrong.
Seen this play too many times and it's getting really old that people keep falling for it. It's time to end Republican's reign of terror.
13
With all the debt the “Trump organization” is carrying, no wonder he is continually pushing for lower interest rates.
12
"A White House official said that Mr. Trump would also likely support infrastructure investment as part of a stimulus package."
They have been saying this for years. Surely they must have found something by now, shovel-ready and all?
8
For all the people complaining, perhaps you should look at bond rates in comparison to other countries:
US
2 year 0.70%
10 year 1.00%
Germany
2 year -0.83%
10 year -0.63%
UK
2 year 0.22%
10 year 0.39%
Japan
2 year -0.25%
10 year -0.12%
Australia
2 year 0.45%
10 year 0.79%
The US looks pretty high doesn't it? And that is considering that the US economy is doing better than any of the other countries. There is no reason the Fed should be paying higher interest rates when US fundamentals are in better shape.
1
So now I will get even less interest in my savings accounts? How does that help the middle class?
13
What a strange move by the Feds. It will not impact the economy one iota. It will only hurt the poor people who depend upon interest income.
15
The Fed’s misguided effort to prop up the stock market proves Bernie Sanders’ and Elizabeth Warren’s thesis that our government acts principally for the rich.
People won’t start going out to eat or to buy furniture because the Fed cuts interest rates. The real economy and workers will get very little benefit.
Ironically, investors seem to have figured this out, too, as the market tanks.
Great work, Powell!
8
As I write I can report that Trump's stock market solution has crashed and burned in spectacular fashion.
Yes, it is Trump's fault. "The Leader" commanded his appointee to cut rates and his dictate was followed. If you doubt that, simply imagine the Trump's self-lionizing tweets if the stock market had rebounded.
Meanwhile he hasn't really articulated a solution to the public health crisis. Odd, how Trump has overruled both houses of Congress to declare an immigration emergency in order to get money for his wall, yet he continually downplays the expanding health emergency that is taking lives right now.
Or maybe not. In 2016, most of us understood Trump's monumental incompetence for the job. Now people are suffering and dying as a result, just what we feared most.
14
There is no plan is there? Nothing. This is just a panic move that's both useless and disconcerting. The markets are even more unnerved because of it. Last week's selloff is a symptom, a side effect of this epidemic - not the problem.
Now that Trump has gotten this very large rate cut he can refocus his all energy and resources on getting the next one. No time for half-measures. Right?
Our resilience as a nation is being tested, and we may no longer be able to cover for the incompetence of this administration.
14
A shortage of investment capital is not this economy’s problem.
There is a glut of capital with nowhere to go but billionaires’ pockets .
Infrastructure program anyone?
11
This means nothing to me. Retired on a teacher's pension, with a small IRA and Social Security, my concerns are how to protect myself and those I care about from the coronavirus, how to pay the rising rent here in coastal Southern California (I'm moving), and how to get a government that cares about people like me, as opposed to the "fat cats".
I was happy today to get a ride over to my polling place and fill in the circle for Senator Sanders. Maybe we will end up with a decent public healthcare system that doesn't cause bankruptcy or death to so many - as every other industrialized country has.
9
@EB Don't count on it. The rich are rallying around Biden to steal it from Sanders (or Warren who would be acceptable in my book). I don't even think Bernie would be a great President (as far as international relations goes), but at least he is not a crook and he is the real deal in that he is not bought be Pharma or Big Oil. This is why they will not let him win. And the sheeple in America just go along with it just because Biden finally did okay in one primary out of 50.
So let's hope all these pollsters are very wrong AGAIN. Because if Bernie doesn't win, a lot of people will stay home and we will have another Jill Stein, thus ensuring four more years of Trump (assuming it is not forever).
2
COVID-19 is the root cause that's disrupting the markets and potentially our lives. Vaccine development to prevent further spread at the earliest should be THE GOAL, everything else is only is reactive and may help short term but worsen things long term
5
The Fed has lost its independance. It's reactionary policy to tweets is not helping.
Why now? Too early to interfere. The cut will not help in any way.
5
@Common Sense
Other countries were already cutting rates leaving the US at the very high end when US financials are better than most other countries. This move does bring the US closer to parity.
Quote from the article"
"But there are limits to what rate cuts can do to contain the damage. While they can bolster confidence and help to keep borrowing cheap, central banks cannot prevent disease from spreading or mend broken supply chains amid factory delays."
Pretty sure this should be the main take-away from this article. I understand that it is important to protect our economic interests but let's be real, if this thing should happen to turn into something akin to the second go-around of the 1918 Flu Epidemic all the rate cutting in the world is not going to help.
If you're going to throw money at the problem perhaps it would be more beneficial to provide more money for testing kits, bolstering our hospitals, protecting our health care workers. You know, hedge fund owners & CEO's can get the virus too, they might be inclined to want a robust response to the virus if it threatens them. Their billions of dollars won't mean anything if they become a mortality statistic.
14
Trump needs to call Obama as it was him who saved the country from Bush's mess. I'm sure Obama would work with Trump to make sure we don't have another meltdown.
10
@Missy
Obama ushered in the slowest recovery from any recession in history. His stimulus plan accomplished next to nothing. Sorry but Obama doesn't have much to add to the conversation.
1
Your assertion would be stronger if it had some data.
You should check the facts on that one.
The Fed Reserve now appears to have wasted a resource by deploying a rate cut in a circumstance where rate cuts yield no benefit. There was no benefit to a rate cut in this instance because the present contraction in spending is unrelated to rates and therefore unresponsive to rate-based stimulus.
This bad policy decision was disappointing because, as growth softens and as consumer confidence diminishes, Fed Reserve should have conserved resources now for effective deployment later (post COVID-19) at a time when spending would respond to rate stimulus.
-Michael
11
When bank rate debt holders
Become policy molders
Their pocketbook smolders
While the economy moulders
Can we see the taxes now?
5
Just remember to wash your hands after handling all that money that’s coming to us.
8
It appears that Trump has the Federal Reserve intimidated just like the rest of the D.C. timmys and sycophants. So sad.
8
One big palliative having no relationship to the virus' impact. Just throwing a bone to Trump.
9
Make money cheap. Stock buy back good. Tell Americans this for coronavirus.... they no understand.
4
Did we already pass the cat bouncing part?
1
Protect the economy from the coronavirus? What about protecting the people?!?!? This is a joke, right?
15
I wonder how much this will save Trump on his "business loans."
Sorry, but we've all seen the last four years that Trump supports nothing if it doesn't benefit him personally.
12
Yesterday in anticipation of a rate cut the stock market soared. Today, after the rate cut, the market is tanking. Good thing you have one of the greatest con men in the history of the world in the WH. I'm confident he can spin this as winning.
7
The biggest glimmer of hope is, The President is the world's leading expert on the human immune system and on the creation of new vaccines.
4
@Blue in Green He became the leading expert on the immune system when he found the time to cram it in between becoming the greatest General in the world and the leading expert on the economy. It wasn't easy. Good thing he's a quick learner.
6
Why did the American voter feel compelled to inflict this president on the rest of the world? Was it something that we did, something that we said? Can’t we work this thing out? This torture has gone on long enough now.
16
Tomorrow's GOP: If you really want to stop the coronavirus and save lives you need to cut taxes, too.
4
That’s not going to get people into restaurants or ballparks or onto cruise ships.
A complete waste and a pure show of desperation.
11
Powell and the Fed successfully bullied by trump.
No arrows left in the correction quiver.
Print more money is the next thing trump to demand of Mnuchin.
Venezuela is closer than you might think.
6
@Bill Brasky Sadly, I have to agree with you.
1
Finally everyone agrees that Trump is only interested in pumping up the stock market so he can get re-elected to continue ravaging this country. And no one seems to be able to control him, not even the fed. We are in a dictatorship ! And the only thing our dictator is interested in is making the rich richer, the poor poorer, pushing the middle class down the ladder, and making this country whiter and poking the rest of the world in the eye.
Let’s see how long this can go on...
8
So is the Corona Virus going to rearrange its portfolio?
6
I'd like for the Times to explain what the fed's slashing of the interest rate means for us common folk. Thank you.
4
@Mangal Pandey Obviously I'm not the NYT, but for the "common folk" this basically means nothing. If you're about to buy a house or have an adjustable rate mortgage the rates *might* tick downward but otherwise it won't affect you a bit.
Wall Street punked you on the prime rate cut Jerome. Don't let them get ya on quantitative easing, a fancy name for borrowing from your parents. I've got news for you... the parents are broke too. You know they're coming for it next. The fellas that comprise Wall Street are in it for the money grab and nothing else. They don't give a fig for this country. Work for the United States and not them for a change.
3
The Dow is down 766 at this moment despite rate cut.
Whoops.
2
And the Dow drops 700 points. Another bright idea from Donald.
7
Powell notes that rate cuts won't paper over the agonizingly slow and inadequate Federal response to this epidemic.
Unlike Trump he wisely admits he does not have all the answers. Nor will he take all the blame.
Could he be trying to hint to Trump to give up on the gratuitous and self serving casual lies only to look like an old ignorant buffoon a few minutes later. Then double down by blaming the free press and trying to gag it at every turn.
Trump would have a chance at being effective if he would go to Capital Hill today and push Congress to unleash spending across the waterfront to deal with this epidemic.
Expanded Medicaid, a vaccine, augmented hospital beds, staff, supplies and a nation wide Manhattan style project to get scientists collaborating.
So much to be done and so little time.
Yet what I see are delay, campaign rallies and tweets not meeting with Congress and major action.
5
So the moral of the story is Trump will put the stock market on life support before sick Americans.
7
Trump has been badgering Powell to keep interest rates low for years now in an attempt to artificially rev up the economy. When we really need a rate cut which is not now there is no room for the Fed to act. The foolishness of the Trump administration has no bounds.
5
The Feds are cutting rates to appease trump. Trump doesn’t care about the long rage health of the economy, he just wants a band-aid placed on the gaping economic wound and hobble it along until after the 2020 election.
We need elected officials to act in the best interest of the American people, not in their own best interest - I am not confident this is happening
6
You Americans, our friends across the Pond, must be growing so tired of winning by now. Too much of a good thing and all that. In fairness, Trump did warn you all that you would tire of it by the end, as a result of his expert handling of the US economy. It is indeed possible to have a surfeit of all things good, even winning. Then, la dolce vita becomes too commonplace for those who can partake of it. It looks as if we might have arrived at the tipping point.
7
We have a hard lesson to learn.
1
In addition to hurting rather than helping the stock markets, any one careful enough to have cash in the bank will probably now face an interest rate cut from the bank and thus an income cut.
7
Powell announces rate cut, markets rise 200 points. Trump begins bleating and Market drops 1200 points. Is there a lesson here?
7
Even as I realize that the likelihood of a Trump or Biden Presidency will not curtail the growth of income and wealth inequality I watch transfixed the car wreck unfolding south of our border.
https://www.washingtonpost.com/us-policy/2019/02/21/income-inequality-is-rising-so-fast-our-data-cant-keep-up/
I wondered as I read the history of Woodrow Wilson's Creel Committee what the effects of a century of gaslighting might do.
The purpose of gaslighting has always been; the subject not understanding right from wrong. I am not a psychiatrist but I am afraid the century long experiment has been a complete and total success.
I understand data and I am trying to understand why the Obama/Biden administration is considered a success when the hope and change did less than nothing to stem the 55 years of growing inequality and the next election may see the end of social security and an already frayed and weakened social safety net.
My history tells me that there never was a food shortage in Ireland and that the potato blight was the excuse to cull those not contributing to the economic success were culled as the newly created neoliberal The Economist led the demand that the hungry not be fed.
I lived through the Quebec "quiet revolution" which lifted all Quebecers out of the endless conservative hierarchy of a few rich and a whole lot of poor.
I pray the next American Revolution will be a quiet one even as at 72 the odds of my watching the revolution grow by the hour.
7
You're expecting a revolution but you're gonna get something closer to a civil war. We are too divided to stand.
This administration is clearing the equivalent of a square peg being forced into a round hole all the while telling everyone one it's a perfect fit.
For the life of me, I have no clue as to the reason nor rhyme of this motive to cut interest rates by 1/2 percentage point as a "pre-emptive move to protect the economy from the coronavirus."
How about spending more money on the testing kits so they are available or how about .5 percent interest loans for families if the breadwinners must stay home due to this virus?
Once again, sound the alarm to close the barn door even though the cows have been long gone for awhile.
9
The conservative "Starve the Beast" strategy is now in place. Covid-19 is hastening a recession, the federal government is already spending a trillion more than it takes in, and the Fed has no tools left to stimulate the economy.
7
A Fed rate cut would be a reasonable option if the problem was tight credit and high unemployment. A potential pandemic, on the other hand, requires that consumers and businesses be convinced that America’s leaders and institutions are prepared to handle the crisis.
Nothing that Donald Trump has done since his inauguration would lead anyone to believe that he is capable of managing this or any other crisis. On the contrary, Trump’s penchant for lying and obfuscating to gain short term advantages conveys a marked absence of focus, understanding and willingness to honestly confront essential circumstances.
Thank God for leaders like Dr. Anthony Fauci, Director of the National Institute of Allergy and Infectious Diseases, who is both knowledgeable on the facts and willing to share them with America.
9
I work for a major railway company that runs an immense rail network with a skeleton crew. When these overworked and exhausted workers inevitably fall ill, which they do with regularity, the company will not accept medical documentation as proof of illness and disciplinary measures frequently ensue, persecuting the worker to function while ill, potentially spreading the virus, and endangering public safety. To add insult to injury, these same workers receive negligible, if any, sick pay while absent from work due to illness. This is in a country with socialised medicine and free healthcare, better placed than most for withstanding a viral siege. Even so, how can these workers maintain employment stability during a pandemic? How can they self isolate for fourteen days and still pay their bills and feed their families and avoid persecution? They’re not paid enough during healthier times to plan for a doomsday scenario.
America is well placed for economic ruin emanating from a viral outbreak because it has never insulated itself from the risk. Countries that possess socialised medical infrastructure and humane employment laws will weather the storm much more effectively. Only privileged Americans, with generous benefits and paid sick leave, will be able to afford to get sick. The rest will suffer as they must.
7
Goes to show you how little the current administration understands macro economics and irrational fears of the market. The fed, by taking a huge sledge hammer to the rates, signaled that they are worried. And the irrational investors/gamblers (which also includes little of my money) saw it as a sign of fear and the market reflected the fear. We must keep our fortitude and calmness in times like this...and this administration has neither the fortitude nor clam.
4
Sounds like the Fed's just interested in propping up stock prices by making interest bearing instruments less attractive. Very little economic stimulus will result - only a bit more fuel added to a years long speculative stock surge. If Trump wants to be reelected - get congress to approve a trillion dollar infrastructure program - rebuild our crumbling rail and highways and bridges! Interest rates on US treasuries will be at historical lows - basically free money in the short term. That alone could ignite real growth in the face of a pandemic and that growth would last decades. Or wait until January 2021 and get it done with Dem's in charge.
5
There has already been 581 comments here. I fear that many Times readers will have succumbed to the coronavirus before they reach this entry of mine. But here goes...
Like many others, I'm simply disgusted by the government we have.
31
@Gary
I survived long enough to read this!
2
So the Fed bows to pressure from Trump, do an emergency cut, and the market still tanks. Now what?
Instead of cheap money, and tax cuts, how about investing in the science to find a vaccine and provide medical care instead of cutting the budget of the CDC and NIH?
Financial jujitsu will not stop a pandemic.
6
The "fed" just made it cheaper for the elite to borrow money to buy stocks that have plummeted to their lowest levels in 10 years. In 2 years they will sell these same stocks at a premium to the band wagoners ensuring themselves a tidy tax free profit, collectively in the trillions of dollars.
Catch that falling knife.
6
I see that Wall Street has been reassured by the Fed's slashing of interest rates! We're in for a rough ride, it seems.
2
I don't see how this could help. Covid-19 is by definition a true black-swan event, something that's not engineered by men (unlike the subprime mortgage crisis that we KNEW it's heading off a cliff). If anything, I see this as a good thing, that the corrections in markets (not just stock markets, but hopefully in property markets, and more) as a good thing, since all of them are way, way, way overpriced. Case in point: Stock market (NASDAQ) returns in 2019 is 37%+ which is clearly not sustainable. Even if it comes down by 20% now, it would still have been 17% ahead than it was in Jan 2019.
Me, I'm not worried. Let the correction begin. As Buffet would have it, when everyone is heading to the exit, it's high time to go back in.
3
The Fed is not responding to fears about the coronavirus on which a lower interest rate will have no effect, but on trump's fear that the economy will slow and stocks plunge further, leading to his defeat at the polls in November. Trump once again thinks only about himself and not the sufferingof the nation.
5
This is an acknowledgment that the impact of the virus will probably be severe and the President is scared. Unlikely he’s scared that people will suffer (other than himself)
3
An immediate cut of all tariffs and duties, something the President can actually do would do more to immediately stimulate the economy both in the USA and globally than a rate cut.
The fed was right to cut. It's pretty obvious we are going into recession. It's not enough to overcome the terrible economic policy by this administration.
Small businesses that have had their cash flow squeezed by draconian tariffs will not survive long enough to be able to borrow money at lower rates.
1
The President finally is achieving one of his goals with the Fed left with only 1% to cut before arriving at zero. He probably thinks thinks that means free money, as if a rate of zero or into negative territory will cure all ills. Time for the Prez to take a break from the campaign trail and focus on the spread of covid 19. After further consideration of that last sentence, maybe people with the skills and abilities to deal with covid 19 left in this administration would be better off with a Trump that is engaged elsewhere so they can get their best effort out there without his meddling.
5
Currency manipulation. Simple as that.
11
Trump will cut the interest rate any time he can.
Trump controls Powell.
Interest rate cut = more profit for busineses.
9
@Paul Schejtman Interest rate cut = more profit for busineses + less interest for elders who depend on their savings
9
Well. I guess that rate cut didn't work. I wonder what they will try tomorrow?
It reminds me of the old Earl Weaver story about when the Os were in the middle of a big losing streak. The players demanded a team meeting. Earl replied "so if we have a team meeting and we lose again tonight, what do I do tomorrow? Have another team meeting?"
9
Trying to stop a pandemic via monetary policy. This is 2020 in a nutshell.
17
At this time the only effect of a rate cut is to pump up stock prices. The effects of that on the real economy will be very limited. But I guess Trump and his rich friends know not to let a good crisis go to waste. What's next when this doesn't work? More tax cuts for real estate developers and rich people?
7
What if, just what if, the Fed is doing precisely the wrong thing right now in cutting interest rates? What if the feckless Fed chairman was more concerned about keeping all dimensions of our economy robust rather than spinelessly giving in yet again to Trump's inane Twitter bullying? We have trillion dollar deficits, bond interest rates ridiculously low, simple savings interest nonexistent, stock prices tend to be madly overvalued, and a correction arguably was long overdue in any event. It might be important to keep in mind that though Trump graduated from the vaunted Wharton Business School at Penn, he has betrayed near-zero understanding of business, government, or economic matters. What if the obsessive focus on the stock market by Trump and his minion Powell is undermining overall longterm economic growth?
275
@Christopher
What if we are already in recession and the fed knows it. What if they are doing the right thing?
What if it's not enough?
Powell, unlike Trump has an Juris Doctor degree from Georgetown where he was editor and chief of the Law journal.
Powell has an incredible background of education, public service and private sector experience.
I really think these attacks on Powell who, unlike Barr and others has been entirely professional in his work at the Fed, is taking partisanship to an insane level.
Powell has been one of the few Trump appointments who has been professional and none-partisan.
It's pretty clear that we are in jeopardy of a massive economic slowdown that could devastate millions.
Powell can't solve that but he should do what he thinks is right and is in his power to prevent that.
9
@Christopher
The Fed would have done the same if Covid 19 became pandemic during the Obama years. The peanut gallery denouncing them doesn’t have access to the data the Fed does. They probably have both transaction data from the banking system and business surveys that show economic activity is slowing sharply. Since Fed rate cuts take several months to feed into the economy, it may be too late. But they’re doing their job with the few tools available to them. Anyone seeing the devastating economic effects of Covid in Italy, South Korea, Japan, and China would realize that.
If you don’t like how the CDC and other federal health agencies are responding, the Fed has no control over them
4
What if his grades were not embargoed.
13
Each time the market undergoes a healthy correction because of trump’s trade war, and because of the massive increase in deficits caused by trump and gop tax cuts for gop billionaires and companies that were already paying little or no taxes by offshoring money, and because of the panic caused by a bumbling trump, the fed cuts the rate. It does nothing to address trump’s irrational behavior and in the case of the latest cut, the fallout from trump’s very slow response and utter incompetence. He tried to overturn obamacare and create chaos, slash spending on the cdc and nih, cut aid to the un and foreign countries-all these have worsened coronavirus and its very serious threat to america. The fed cant do anything about an insane trump
7
Your chart is wrong. Look at the numbers on the left.
1
This is what winning looks like.
10
Anything to keep a petulant president at bay. Vote!
16
This somehow benefits Trump personally. The rest of us, naw!
7
No worries. Donald (Houdini) Trump will make the virus just disappear!
6
Couldn't trump just disappear? Works for me.
5
Who’s the socialist now?
25
@Opinioned! Socialist to the rich!
2
Trump is using the US to prop up his portfolio.
Disgusting!
15
Go Donald Tump! This will for sure stop the cronovirrus!!
6
Idiotic and pointless, other than hamstringing the next president who has to deal with and clean up the Trump recession.
Just like in the Nirvana song, Trump and his administration are "...stupid and contagious."
12
The Fed has completely lost its way.
11
coronavirus affects the world. Trump can announce all tariffs are suspended. Further, the US is airlifting coronavirus kits to Iran to show solidarity with the people.
it may not work but worth trying?
2
At least the government has finally taken some action with regard to the coronavirus... I just wish the action taken were at all relevant to the problem.
7
"Central banks cannot keep disease from spreading, prevent workers from losing hours at work, or mend broken supply chains amid factory delays.". EXACTLY. This rate cut is not going to do a darn thing to change the fact that damaged supply chains are causing a production and sales slowdown. It's not like companies can magically create a factory in the US to make the supplies they need; that requires long-term planning.
I am disturbed by today's action by the Fed. Yet again, it appears the Fed is bowing to angry pressure from Trump. What happened to the Fed's vaunted independence? And the rate cut could end up creating more fear and panic.
8
Is Coronavirus really the reason? Or is it buckling to Trump's cajoling & brow-beating, in order to sustain his short-term economic sugar-high?
14
The problem is this isn't an economic problem, but a health problem that drags on the economy. You can't fix a virus with lower interest rates, so this is just nonsense as people have money, they just aren't traveling or working in factories.
8
Yesterday all Trump’s Billionaire Cronies did him a favor and boosted the markets.
But the markets did not comply by themselves this morning.
So the Fed cut rates. That did not work either.
So Powell did a Press Conference. Markets went way down.
NOW WHAT?
Likely Trump Tantrum.
17
Uncle Jerome to the rescue of the "strong economy" yet again. The problem is, he's almost out of nutmeg.
4
Republicans well capitalists only play.Thing look bad ,hand out money to the rich for a fraction of what normal people pay.
4
Excellent!
Glad I’ll be able to get a low interest loan to start up my mask making factory!
13
Increasingly, Jerome Powell comes over as Trump’s lackey. Jerome Powell isn’t running the Federal Reserve for the good of the nation; rather, he’s running it to please his master. Can we, perhaps, say that Jerome Powell is ‘his master’s voice’?
11
I’m breathing more easily just at the mention of an interest rate cut. What can the Fed do now that will cure my cancer?
9
The Federal Reserve can slash interest rates all they want, the COVID-19 Virus is in control now.
9
It’s well known that low interest rates kill viruses. Jay Powell has turned the Fed into Trump’s private pr firm, just as Barr has turned DOJ into Trump’s private law firm.
13
An absolutely ridiculous intervention just to give a boost to stock market and to Trump.
When a recession hits the Fed will be impotent.
12
This is not the remedy required in a pandemic mode. They had little room to begin with and now there is hardly anything left, if needed. Then, the faux president immediately said this is not enough and it should have been bigger as we are not playing on a level playing field.
Really? This faux president care only for himself and not the citizens of the US.
The Fed is only providing $$$ for the 1% with most not holding stocks except in their retirement accounts, if they have one.
Where is the leadership? Oh yeah, there is NONE!
6
Unnecessary and election year. Sad to see the Fed cave like this.
8
Headline says, "Fears Mount!" Who says so? We need less fearmongering and more facts.
1
It appears Capital markets are afraid of slowing activity. So rather than do something to solve the health crisis, bone spurs throws money at Wall Street.
3
@Robert McConnell Look at Asia as a whole; Hong Kong retail sales down 80%; All schools in Japan closed;container ships from China to US down 50%. The World is connected;even though Trump GOP repeats the America First Mantra and "Fake News". Those are facts.
This was predictable as it was idiotic. Our president clearly doesn't understand the limited impact on the economy just cutting interests rates has instead of actually proactively combating the virus as a public health emergency. Tired of this incompetency in the White House. This time it may cost many American lives. And by that I mean people the White House considers Americans. God Forbid this virus hits more vulnerable populations across the states. That will be a disaster.
7
The reckless pursuit of money has destroyed the earth.
10
I fail to see the connection between cutting the Fed rate and dealing with the world-wide Corona Virus. The original charge of the Fed was to help control inflation, but central bank borrowing rates have in the past decade become the tool of preference for all sorts of economic and political problems.
One can only assume that Powell, like everyone else in the Trump orbit is the President's lap dog- Trump calls for a large cut, and presto, less that 12 hours later Powell reduces the rate by a large increment.
What possible help can lower borrowing rates offer, except to give the idiots on Wall Street cheap money too continue their heedless gambling on the biggest Casino of the all, Wall Street. The days are long gone where considered long term analysis of companies were the basis for the ups and downs in the stock market. Now, with approximately 2/3 of trades executed by automated trading apps the stock market means nothing in terms of the overall health and viability of the American economy and the companies traded on Wall Street.
The Europeans have made the same mistake, and now, with already negative rates, and a slowing European economy, they have no room left to help bolster European economies.
2
A dog and pony show that will have zero impact on the average American.
6
An absurd move by the Fed. Let’s not move to an inflationary position as we have a supply issue not a demand problem. There were so many super stupid decisions made after 9/11. I see the same pattern emerging. Crisis, poorly evaluated late decisions and Main Street pays again.
5
"President Trump, who has no control over monetary policy, has been urging the Fed. to lower interest rates.....". Yeah right, and now Powell is shaking in his shoes afraid of the wrath of Trump. So he lowers interest rates. Just as Barr interfered with Roger Stone's sentencing, claiming he didn't know Trump was going to rage tweet. Everyone in this administration now seems to be psychics, somehow able to appease every Trump wish before he even tweets his rage. The answer to the COVID 19 is not cuts to interest rates, tax cuts, or suspending tariffs, it is full steam ahead organization from the top down utilizing test kits, production of a vaccine, giving the public information they can trust to be accurate and not sugar coated by Trump, and coordinating with State and Local governments. Again Trump is more interesting in the health of the stock market than the health of the public. It is all about the coming election in Nov. 2020. Right now it is not the economy, stupid it is the health of the American people. Sad!
6
This is being done for the monied investor class and potential Trump voters and I resent it.
If you just hold your positions instead of using them to speculate on a minute-by-minute, hourly, daily, weekly or monthly basis as the privileged investor class does, then the current downturn will turnaround as all others have in the past, the market will return to its last high and you won't lose a sou.
My viewpoint must sound very quaint to those of you who pillage and manipulate the markets for your personal gain everyday, but that's the way it used to be. People invested for the long-term and held their positions.
The Fed should not be rigging the markets to protect speculators. Small businesses and seniors on fixed incomes and distributions should be assisted by Congress directly through enactment of a small business loan program and suspension of required minimum distributions in 2020 and beyond if necessary as was done in 2008 and 2009.
Powell is a craven coward and boot-licking lackey for Trump and the speculative investment class. He's a national disgrace!
6
Oh, good, thank god. that's stop the virus.
2
Clearly Jerome Powell is now just an errand boy. Hope he's proud of himself.
8
Lower rates? Is that by injection or nasal spray?
How about The Republican Two-step Cure for Everything
Cut taxes
Blow up Obamacare
8
Give me mortgage or give me death.
4
It's obvious that a rate cut won't help someone who can't pay their monthly rent due to illness. The 1% are simply using this for cover, the same way swimmers used the swimsuit controversy to dope.
http://pjlehrer.blogspot.com/2020/02/whats-driving-your-investment-strategy.html
6
“We’ll see what happens, nobody really knows.” — Donald J. Trump, president of the United States / Putin’s puppet
See, don’t you feel safer already?
10
This feeble, obvious Trump inspired move amounts basically to rearranging deck chairs on the Titanic. 
5
Making more corporate profits is a sure cure to the coronavirus.
Vote GOP for the continued health of all of America, since the GOP will get rid of the stupid CDC and get government totally out of healthcare!
5
@gratis:
We're assuming you're employing satire . . .
4
Assuming that everybody is destined to get this virus. Wherever you may be, look left and right. Count 100 people including yourself . Two of you will die form the disease. That is scary. Why isn't the President worried. Why is he lowering interest rates? What is that supposed to do??
5
The decidedly Champaign-socialist audience of NYT, so it seems at least, has a problem that the rat is cut - it does nothing to help people, it is only for rich, it does not strengthen the economy, it helps Trump who is invariably beast of all beasts.
So, what do you want? Rates up? Coronavirus exterminated tomorrow? Life back as in Obama years? Why do you so malevolently complain about everything? What else can Fed do but a thing like this? It is likely ineffective but it may help a bit, mentally if nothing else.
We just need to hold tight until the stupid virus is brought under control. None's fault that this mayhem is taking place. We are in for a rough ride that could not be prevented and that will take its course largely irrespective of what we do (except vaccine or natural destruction or subsiding of the stupid virus).
Pump pump pump!!
What Trump doesn't understand is the the stock market is not the economy. A cut by the Fed may bump the stock market with a temporary sugar high, but it won't reopen shuttered factories that US businesses depend upon since the supply chain is now global.
This is typical Republican short term thinking on steroids. Trump should be thinking about addressing the pandemic, including replacing science-denier Pence with infectious disease genius Anthony Fauci.
Stop the pandemic, and the world economy will recover. Ignore it and we're in for a recession (or worse).
12
Globalism....are we having fun yet?
It’s one thing to have products like toys, clothing, and household goods manufactured offshore in China and India...but medicine, pharmaceuticals?
How about we transfer the production of pharmaceuticals back to the United States. Until then, for our life-sustaining medicines we rely on a country where animal to human viruses proliferate and deadly pandemics originate...where even the drywall is suspect.
Brilliant....(note sarcasm).
8
By how much does this reduce Trump properties' interest payments? I see no other reason for a rate cut.
8
seems like the wrong medicine.
We need fiscal policy, either broad based, or better yet, one tied to the emerging corvid19 outbreak.
2
This is not the way to use the Fed. The challenge to the economy posed by the coronavirus has nothing to do with money not being cheap enough.
This move goes back via the Greenspan Way, and it is about making investors happy, not keeping prices and markets stable, which is what central banks are supposed to be about. The danger of lowering interest rates with every downturn in the stock market is that when the real economy actually does need a shot in the arm by way of making capital cheaper, that tool won't be available. Interest rates can only go so low.
8
On so many levels, the sheer incompetence is surfacing now. What is the Fed planning if (when) the recession hits?
Here is what should be done:
Make funds available to enable a broader testing of the population - for free!
Make sure that the costs related to that test and the potential treatment are covered. There are many people who fear the costs to go to a medical provider.
Makes sure that all public schools are well equipped with all needs to protect children, teachers; Run ads to educate people (not scare people) to follow a strict hygienic procedure throughout the days
Make sure that health professionals and scientists are running the process from the start to the end - and Mr. president just be quiet for one or two weeks!
Make sure to work together with Congress because they need to approve funds
Make sure your coordinate with other countries and WHO
10
If the "markets" could find a way to be less rational, they would. If Trump could find someone else to blame he would.
8
Basically, the fed is out of bullets so this stimulus will be brief. CEOs are already borrowing at lightning speed meaning interest rates wasn't the obstacle.
What's really happening is the "so-called" independent FED paying heed to its master's voice. Donald needs a rising stock mkt to win in Nov. Powell repeatedly lowered rates when he didn't have to because Donald ordered it done.
Now, when stimulus is needed, the coffer is empty but that's to be expected from a president whose salvation was bankruptcy, six times.
9
Overreacting. And btw so many investors where hoping for falling courses to start buying... they will now be disappointed.
1
Cutting the rate early may actually exacerbate the panic.
One has to wonder what the real forecasts are stretching out to the third quarter, not what we are being fed from the ministry of propaganda.
4
I guess this will make Nero II happy -- we'll find out soon enough via tweet.
But what about us ordinary Americans, you know, the people he's supposed to be serving? How does this help US?
7
The Fed cuts rates; Simple - we spend less not more. Period.
4
It is past time for Powell and Trump to address the Seniors and Retirees who live on the interest from their savings.
Why do they get punished by official economic policy without comment, or maybe even an apology.
13
Wouldn’t it be nice if Trump and the GOP had not greedily run up record debts and deficits? Their greed has weakened the US’s ability to respond to recession threats and realities.
Moreover, from a public health standpoint, greedy GOP fiscal policies have left the US with arguably little room to respond to pandemics. For example, testing for corona virus infection should be free of charge for all citizens. If self-quarantine is required, employers and employees should be subsidized to make that practicable for real people who need to eat real food and pay real bills.
12
Misleading headline and story. The Fed cannot control interest rates, which are set at auction for treasury bills. It has control over the discount rate at its window, lender of last resort to banks that cannot get loans from private banks to cover their overnight shortage to meet liquidity requirements. That lever need not directly affect the Treasury auction. Milton Friedman made this point clear, and history has shown he was right. For example, during the Bush Jr administration, the Fed wanted to raise rates but could not because T Bills were being bought up which kept rates low.
This is yet one more economic/finance myth that Trump doesn't seem to grasp and which his jawboning has made ever more Americans believe. It's nonsense.
The Fed's target rate is not any sort of guarantee of coming interest rates.
2
True, one only need to look at credit card rates and car loans to see that simple fact
2
It's very telling what this administration seems to be focused on at this critical juncture. Right now, there is a crisis at the CDC where testing efforts have been hamstrung due to poor quality control and leadership. Instead of focusing on containment and safety issues, Trump et al. seems fixated on the stock market and what this means to his curated image. Why does he seem to be fixated on getting a vaccine out in months? Because this would be in time before the elections. After that, it doesn't matter to him. Is it any wonder that rather than taking the reigns himself on the most serious crisis of his presidency, Trump decides to hand over management to Pence.
8
In the face of a serious pandemic, what is our government truly interested in? What goal inspires prompt, drastic action?Preserving the health of the wealth of the wealthy
11
Coronavirus is a medical problem. How does this action prevent the spread of the virus?
12
I would be terrific if the president allocated some of the money he saved by slashing the CDC budget and eliminating the pandemic preparedness group established by Obama to fund the hospital treatment for people infected with Covid-19. But then that would be expecting the president to act like a leader and not an insecure narcissist whose only interest is propping up the DOW average.
10
This ought to mark the end of "financialization," the belief that all is reducible to financial causation, financial analysis and financial correction. It's a given that stock market forecasting is a mug's game. Now, I would say the same of central banking.
6
It is not at all obvious how a rate cut is going to help the economy when the problem is caused by the coronavirus and a disruption in the supply chain. Further, by cutting the rate now, the Fed leaves themselves with little or no option if a business cycle recession were to occur in the future. Doesn't seem like the smartest thing to do.
13
I was having flu-like symptoms, but now that the interest rate is lower I'm feeling all better! Thanks, Fed!
21
Trump created a public health problem by slashing funding from CDC, NIH, and global infectious disease programs year after year. Slashing interest rates in a pandemic isn't going to save the economy as we face one of the worst national health issues in decades.
8
@Jacquie Trump has increased funding to the CDC and the NIH.
I wonder if the Fed will look to raise rates when the Covid-19 situation is more certain. My guess is... not a chance. Why would it when instead we can barrel ahead at full speed towards an uncertain economic future without a monetary policy seat belt?
5
Short-term stimulus at this moment? That sure looks like an effort to boost Trump in an election cycle.
8
COVID-19 WILL slow down the economy simply because it will keep sick people away from their jobs, and healthy people away from everybody else to avoid infection. Besides the already affected global supply chains, restaurants, travel, entertainment events, malls, and any other business that relies of public gatherings could be hit very hard. That said, no one can yet give an informed estimate of exactly how large that effect will be because we simply don't know enough about the virus to put meaningful boundaries on some possible ranges. We do know however that the number of people sickened by it in our country in remains relatively small for the moment. In that context, why does Powell believe that such a large emergency rate cut is warranted right now? With so little wiggle room in the Fed's rates, using as much as a third of what's technically available seems somewhat extreme. Is it possible that the Fed is doing the thing the rest of us have been asked not to, and panicking?
5
I have a large portion of my retirement savings in cash because I don't trust this stock market. As a result of this rate cut, I'll be earning even less income on those savings than before. The last thing I'm likely to do is go out and spend money. Way to stimulate the economy, Donnie Boy!
15
If the stock market continues to go down, it will be a triumph of panic over common sense -- and it will not last forever. For there is really no place else for investors to park their money any more.
The bond market's rates were so dreadfully low already that nobody could make serious money by investing in bonds, and the newest cuts will increase that effect In fact, if Trump has his way, we will have to pay the government for putting our money into bonds (that is what "negative" interest rates mean).
So millions of people will have to put their money back into the stock market -- they will simply have no choice. I understand there is even a term for this phenomenon in Wall Street: they call it TINA -- which stands for "There Is No Alternative."
3
I’m beginning to have serious doubts about Western economics. Is it really fit for purpose anymore? Increasingly, it is looking very much as though it isn’t, it is looking very much like a Ponzi scheme.
The bad effects of poorly-thought-out government policies are compounded by QE, which is used to enrich the already fabulously wealthy; and government economic policies, both fiscal and monetary, are not based in either common sense or logic. So how much longer can this rotten system be allowed to go on?
From my observations, this is not even true capitalism. Not at all, in fact. In a true capitalism, there’s no such thing as “too big to fail”. In true capitalism, if you can’t make an enterprise work, make and enterprise profitable, you let it go to the wall. Further, fortunately, there are ‘capitalist’ alternatives to this failing system, which we could adopt. We could also return to the common-sense economics of the past. That would be a great start.
5
If your only tool is a hammer everything looks like a nail. Not only is The Fed using an inappropriate tool, it is using it WAY too soon. We have no idea how long it will take for the coronavirus pandemic to play itself out. And lower interest rates will not take the place of intelligent fiscal policy (such as infrastructure projects, for instance).
Sounds so much like pandering to Trump that it scares me.
15
This is alarming. I have faith in city & state officials, but it seems the WH cares mostly about the stock market.
I am not a medical professional, but I have suggested the following to local afterschool organizations for kids to reduce the transmission risk in my neighborhood & offered to pay for supplies. I call it Planning & Protocols Prevent Panic.
Keep four feet between students & students AND students & instructors. Mark positions with chalk or tape.
Cover work surfaces with paper that can be discarded after each class. Sanitize all doors & work surfaces between classes with hot soapy water or disinfect with a nontoxic agent like vodka. Ensure that people cleaning wear heavy gloves, don’t touch their faces, & wash themselves afterwards for their own safety.
Have one teacher hold the door to the school open with gloves or a rope, keeping their face averted, so that many people are not touching the door. Have students enter one at a time, four feet apart. Mark waiting positions on pavement outside the school with chalk. Have all students & parents use hand sanitizer or wash hands upon entering the building.
Ask parents not to congregate in the waiting area, but to go outside, & to avoid or use caution in crowded cafes or shops.
Ask parents to let the school know if they have travelled recently or anyone in their family has been sick. Ask them to self-quarantine before sending their kid to class.
The goal: reduce the risk of transmission & downturn.
2
Markets fluctuated so much because there are fewer stocks, lots of excess capital sloshing around, and lot's and lot's of uncertainty not only due to the virus . The markets have been overbought. I was a US/UK Bond dealer and I know money flows are only part of the problem, the supply of goods and services has to be insured. The market had an upswing and then proceeded to drop after the news. This tells me that there is much more risk than the multiplier of a 50 basis points can cover. Rate cuts don't reduce the rates of infection.
2
The rate cut is scaring me. The Fed must think the economy is in much worse shape than just having a temporary slowing due to interruption of supply chains through Asia.
12
So, how much of yesterday's rally do you think was driven by insider trading on information about this morning's "surprise" rate cut? The Fed must have a lot of good chums on Wall Street.
17
Cutting interest rates does nothing to stop the coronavirus, and clearly the stock market sees the cuts as pointless, since it continues to be down. Furthermore, the Fed just gave away the limited power it has to intervene, when the crisis relates to something other than coronavirus. In terms of bolstering US confidence in our systems, that will require getting rid of Trump, who cannot or will not process clear information from scientists would also like to point to Trump's recent incompetent line of questioning of pharmacy execs regarding the possibility of a vaccine for coronavirus. No matter how many times in this briefing Trump was told that a vaccine is a year and a half away, he could not understand that. It should by clear by now, that our federal response is being let by a president with limited cognitive processing ability.
17
@Practical Realities, the vaccine conference was something. I liked when one executive intervened to pop Trump's balloon (full of hot air, of course) and tell him it would be at least a year for a vaccine. I'm pretty sure that executive will not be re-invited to the White House.
12
The markets aren’t even close to the bottom at the rate we are going. Let’s just keep printing money, slashing rates, anything to keep the lunacy going. Can anyone at the top act like a manager and do what’s best and not what’s easiest.
When the average American cannot make even their zero interest car payment, you know we have a ways to go.
10
Trump is determined to goose the economy to the max to ensure his own re-election. But what "emergency moves" are gonna be left for when we hit a real recession? Besides bashing immigrants, that is?
17
No independent Senate. No independent judiciary. No independent Fed. No democracy. No country. Divided, we fall.
26
Just one more thing Trump will take credit for- even if there is no connection. When perception is reality, Trump will say he now controls the Fed along with Justice...
5
Free money for everyone! How is this any different than socialism? It's just socialism for the rich (that's one thing I agree with Bernie on). It's also a panic move designed to cover up for Trump and the CDC's failure to test and be upfront with Americans about the spread of coronavirus. You think the deficit is bad now (running $1 trillion per year with the Trump tax cut), wait until revenues keep going down and Mnunchin tries to push through further tax cuts.
15
Oh yeah......
Poodle Powell responds to his masters' voice!
7
Faced with a intimidating half-point interest rate cut, COVID-19 quickly recoiled into a tiny grotesque blob and slithered back to the Wuhan gutter from which it emerged.
26
What a damning indictment of our society- our actions demonstrate that we care much more for the health of the market than we do for the health of our citizens.
16
More Trump socialism
#TrumpCrash #TrumpVirus
13
#TrumpSlump
4
Supremely and shockingly premature move.
What do they have left for an emergency?
16
The Fed has one tool - adjusting interest rates - that they pull out for every occasion. But in most cases it's like using a hammer to screw a bolt - it really doesn't work. Nor does it give anyone confidence.
11
This is very, very foolish, a political sop for Trump that will not affect the economy. The effects on the stock market - the daily show that Trump is obsessed with - are limited, in both extent and time.
Reducing rates even further will not absorb or counteracts the expected impacts of the coronavirus epidemic. Ironically, if the economy slows enough rate would drop anyway - whatever is the new chair thinking? Or the sage who always gets it wrong, Larry Kudlow?
The FED has a limited set of tools and has just wasted one that might be useful later.
326
@cheryl
Rates had already dropped! As people piled out of stocks into bonds.
Now they’ll also be afraid of bonds.
20
@cheryl small businesses that may be stretched thin assess their financial impact of COVID19. lower rates will help them lower this impact to the extent they need to acquire additional equipment for contingency plans or see lost sales.
The fact that we just gave up another arrow in our quiver has more to do with their irresponsible actions (placating Trump and Big Finance) prior to this event.
12
@cheryl Now the people will suspect there really is something to be worried about and all the denial and bluster from the WH is just that, Fake News. Was surprised to see how empty certain shelves were in my area (out in BFE and in a place not likely to have much of this virus activity) and that was yesterday.
13
Big mistake, too early and too much. This won't have an immediate and positive effect, and will send a signal to the market that the Fed is out of ammo.
7
This is the Fed saying to Trump, "All right, we will give you your rate cut to shut you up when you see that it will not help. And maybe you might realize you should leave monetary policy to people who actually understand economics."
Trump of course will not hear that message.
8
The Fed can slash all they want, but two points will cause Americans to have an unfortunate and inescapable outcome:
1. The majority of Americans do not have $500 in their savings accounts.
2. Our lack of paid sick leave will make the Coronavirus worse.
10
@Sanne
Also the $500 dollars that they do have in a saving account is and has been accruing no/zero interest for the past 20 years. Savings accounts are so 1950s. I will say in the early 1980s when the interest rates were 17% and above I was pulling in $30.00 a month in interest from my super saver account but then Reagan and the Republicans put a downer on that. Since then no reason to even have a saving account.
5
Absolutely surrealistic headline. Sickens me sickens me to the core of my being I'm not being. you know you're absolutely valued at less than zero when the Republicon "president" actually thinks this is some kind of healthful progressive action. How about testing people for real? How about testing kits that actually work? No, where did the money go that you cut from the CDC? Now, we're going to go trillions more in debt because they were neutered.
5
One trick pony. Sorry, real life has moved on.
8
Another meaningless political exercise!
5
more corporate welfare from the Republican Socialists ---
8
Pure socialism for the capitalist crowd. Pure American public hypocrisy. The nation -- my nation -- would die on the vine in short order were it not for one well-placed socialist action after another.
6
and the Hits just keep on coming... Not
Just a thought. If the economy really tanks, like in 2008, and the alt/right Trump party has made the issue of too big to fail bank bailouts utterly poisonous, what will happen when the interest rate at the fed goes down to zero, and the economy continues to tank?
This doesn't look good for Trump, his enablers, his sycophants, and the Rick Santelli/tea party rant crowd. For the rest of us just trying to scrape by, it looks downright dangerous.
5
If it helps the economy (and me), who cares about the virus?
I am Trump - and my 401k is doing great!
2
Trump finds yet another way to personally profit from the suffering of others.
9
‘funny’ that our governments first major response to the corona virus is concern for protecting wall street health, not people health.
10
Pure insanity. Jerome Powell must be in the pocket of Trump. This rate cuts makes things look worse than they actually are. Not to mention it is completely useless. There is no shortage of capital or cheap money in America. On the contrary, we have far more than we need. Why would anyone take economic advice from Donald Trump??
398
@Aurora Panic drives people to desperate action. What happens if markets continue to fall?
The measure seems a drastic response to what has been called a "Democrat and media driven hoax"
22
@Aurora Not to mention that once again, savings accounts will be paying virtually nothing, further decreasing average people's income.
24
@Aurora I would nominate you to be Fed Chair. You're more levelheaded.
14
These cuts will cause inflation. Asking for further cuts is reckless. What is this President doing? More of the same. We can't afford 4 more years of this.
5
@Joe A So the rate was 0 throughout Obama's term but a cut to the rate during Trump is end times. TDS on display.
Slashing interest rates is Trump's answer to everything, even if it doesn't make sense.
8
Interest rates are already near a negligible amount. What is a quarter percent decrease supposed to do except allow our debt-er nation to borrow with little recourse. I know what it will mean for the interest earned on my *savings*. I imagine my credit union has already erased it while I type this comment.
7
Bear in mind that cutting or raising interest rates are economic weapons that are applied to recessions (cutting rates) or inflation (raising rates). Also bear in mind that for recessions the higher the rate , the more potent the weapon and the greater leeway the fed has to snap or stimulate the economy out of the recession, The Trump approach has always been very short term---seeking the immediate return and ignoring the long-term impact--so that now we have a less effective weapon to get us out of a recession--as there is a limit on how low you can go. Increasing the deficit into the trillions as Trump has done combined with very low interest rates puts us in a weakened position should a strong recession hit (as is not entirely unexpected as part of the Business Cycle). I have found that Trump and his administration tend to be ill-prepared for crises and have been lucky in the past that few have occurred . But?
3
We need congressional hearings to answer why the US doesn't have adequate means to test for coronavirus and who made the decisions that led to this crisis.
1. Who made the decision to not use the WHO-validated test that was available weeks ago?
2. Who made the decision to only allow limited distribution of our already inferior test to only select cities?
3. What instructions did HHS and the CDC receive from the White House when the outbreak was known?
9
In the first half of my life, the people at the top showed eminent good sense in running Western economies: they always seemed to be able to find the right solution for the economic problem at hand. Then came the 80s and everything changed. True, monetarist policies helped greatly in the short-term, but then, things started to turn a little sour. Since the days of Reagan and Thatcher, wealth inequality has grown exponentially, as has income inequality. Decent, well-paid jobs with good pensions and perks have evaporated, being replaced by ‘positions’ in the gig economy.
Likewise, in days of yore, the people who ran the economy took a balanced view of the economy as a whole: the economy was run for the benefit of all, not just the few. The needs of the workers, the elderly, pensioners, young savers, etc., were all taken into account. Gone are those days, alas! Trump, of course, takes this to the Nth degree. To Trump, the stock market is everything; it is the economy. But as we all know: Trump has no real understanding of economics. So I wouldn’t expect better from Trump. From Jerome Powell, however, I would expect better. Alas, my expectations, yet again, have been dashed.
If you take all income away from people who depend on their savings to generate a little extra to eke out their often meagre incomes in old age, you also take away their spending power. You curtail their spending power and, in so doing, you make it difficult for the economy to grow through consumer demand.
14
I’m just wondering — with interest rates this low, wouldn’t that encourage too much borrowing and cause a credit bubble? Wasn’t this kind of easy credit the fuel that fed the chasing after investments so much that it led to the invention of mortgage-backed securities and credit default swaps? That didn’t work out so well, as I recall.
8
I am not an economist. But looking at the interest rate trend of the passing 15 years, does this mean the recession is coming? The huge drop for 2008. This is not good news in spite of the reaction for coronavirus. I hope this is not the case.
4
1% does not leave much margin for further cuts if more problems arise.
This is a problem because they cut rates earlier when Trump cried wolf!
9
The Fed's action makes so little sense that the net effect will likely be to undermine confidence further. Now we have to worry not only about the Coronavirus, but irrational and perhaps politically motivated thinking by the Fed itself.
12
I am certainly no expert, but this most recent cut makes no sense. If our economy is booming, as has been reported via various media sources, then why the need for a cut? Furthermore, if they keep making cuts during a "solid economy", what will they do when a real emergency arises? They will have given it all up already. Am I mistaken in my thinking?
9
Yes, let's make sure the investor class gets what it wants.
Heaven forbid capitalism ever having to make it on it's own. Those of us that were happy to obtain 2% interest on protected money were able to accept getting eaten alive by inflation caused by a rampant 'economy'. I'm not speaking of the conservative inflation rates you ad about, but by the actual cost of living increases, which are a strong 5-10% -- due to capital agitation.
15
This makes no sense. As analysts have pointed out, interest rate cuts cannot start production in China and S.Korea, restore lost tourism dollars, or fill empty shelves, hotels, and convention centers. Those are lost dollars and productivity. All it does is temporarily juice the stock market, so Trump can stay afloat. This rate cut leaves the Fed with even less leverage to act in the future when we really need it.
There will be an economic reckoning and price to pay for Trump’s exploding deficit and short-term focus. Hopefully, that reckoning will occur while Trump is still in office, so the next Democrat in the White House isn’t faced with a mess to clean up that he or she didn’t create.
11
Mr Powell, why is the interest on my variable-rate, public student loan still higher than at any point over the past 18 months despite Fed interest rates being cut by >33%?
15
Aren't interest rates already low enough? Why does the Fed constantly cut the interest rates?
I mean, what is the economic rationale here? It's not as if cutting the interest rates suddenly makes the virus go away. The reason for the lower economic activity would be people staying home to recover from the virus. Until the virus goes away, people aren't more likely to engage in lots of economic activity.
And why can't we just have a recession and be okay with it? If we have a recession because of subprime mortgages and dishonest bankers, that's just stupid and we need to increase regulation. Though likely zeal over economic growth is why we cut the regulation in the first place. But if we have stagnation just because it's a while since we had a good invention to spear economic growth (read: agriculture, electricity, or industrial machines not social media and targeted ads), then so be it. Or if we have a recession due to some darn virus, that's just life. I mean, the economy can't always grow. Sometimes life happens. For non-economic reasons, with economic effect. And the Fed can't do anything about it.
2
We don’t need to lower the cost of borrowing money; we need to lower the cost of getting healthcare. Full stop. Vote today as if your life depended on it because it does. Any Democrat is better than Trump and Republicans who want to get private labs into testing, and won’t control prices, even in an epidemic.
20
They just poured gasoline on the fire by acknowledging that things are really bad and only going to get worse. A reactionary federal policy is not the right tool to use to calm a reactionary market and public.
8
After 2010, with congress unable/unwilling to approve additional stimulus legislation, the alternative tools have been either tax cuts or the fed cuts in interest rates. Tax cuts are largely played out and the fed does not have much room for more cuts. Depending on what happens this year, we may see a return to direct, targeted stimulus.
1
I am a senior citizen and have been quite conservative with my financial resources. Trump’s insistence on lowering interest rates punishes savers like me. It’s hard to understand how our hard earned savings are so critical to our economy and borrowers like Trump, but we are rewarded so little. Trump will now lower taxes for the wealthy after he has harmed so many trying to be financially responsible. Maybe savers should be given a limited tax break for the sacrifice they are making.
9
The markets are panicking because a pandemic is going to interfere with commerce. A rate cut by the Fed as has been advocated by the Great Economist, Donald J. Trump, and others who know what to do with a man-made panic, but don't understand a "panic" caused by a virus.
Easy money will not stop the effects of this virus on human activity disrupted by the infection. The Fed is tilting at windmills. Trump can no longer blame the Fed. But this coronavirus pandemic will run it's course regardless of what the Fed does. Sorry Donald, your administration's response to this pandemic as a human health crisis is still your responsibility and the Fed can't help you.
4
Trump should stop worrying about the stock market and interest rates. His focus should be in marshaling resources and expertise to take on the coronavirus.
4
@c harris:
POTUS "should" do a lot of things, but he won't because he is the expert on everything and he knows what he is doing. /s
2
I have to hand it to Trump, he says "jump" and they all say "how high?" -- the Federal Reserve, all republican congress, and it seems the Supreme Court. Time to start saying "no."
7
Isn't it an interesting coincidence how on Monday the market has the biggest one day increase in the Dow in its history. A jump in market value of approximately one trillion dollars. On Tuesday morning morning the Fed announce a fifty basis point rate cut. A great deal of money was made on Monday. I am sure it's highly unlikely but can't help wondering if there might be a tiny leak in the plumbing that carries information out of the Fed to the White House and to the financial community. What a great investigative reporting project for a skilled financial reporter.
8
FOX news (essentially trump’s propaganda agency) is fully engaged in a concerted cover up to camouflage just how badly managed the COVID-19 response has been in the US. The trump administration over the last three years has been drastially cutting budgets and gutting public health agencies, eliminating preparedness teams, and abruptly dismissing expertise. It’s clearly a deliberate effort to dismantle the important measures Obama made to effectively protect the nation from the 2014 Ebola infection crisis. And as with all things Obama, trump is doing these things vengefully, recklessly and surreptitiously. The nation is already paying a huge price with the looming emergence of a similar infection crisis, the COVID-19 outbreak and undoubtedly there is more to come.
11
@John Townsend
I used to watch a Fox News to see what the other end of the spectrum had to say. There is no longer any point.
3
Our dear leader says that the COVID-19 outbreak is all a HOAX!
"The party told you to reject the evidence of your eyes and ears. It was their final, most essential command." — George Orwell, “1984”
This is a key pillar of the trump agenda widely abetted by powerful GOP politicians whose thirst for power manifests a new reality of an emerging authoritative political system.
8
Now, if we can just get the virus to go shopping and maybe set up a factory.
5
This is a stupid move that will inevitable blow up in everyone's face (except the rich, they'll be fine) once the next recession hits and we don't have the room to drop rates any lower.
4
The coronavirus cat is out of the bag, and no amount of expansionary monetary policy (when rates are already so low) is going to mitigate the global economic consequences of the virus.
This is just the beginning, here in the US, where the virus is spreading communally unbeknownst to authorities until days and even weeks later - see Washington and Oregon, for examples.
3
I think this is a wasteful move. The issue of corona virus is going to be supply chains being emptied and they aren't going to refill faster as a result of a rate drop.
Trump gets to beat his chest and say, "See what I got them to do?" Big deal.
4
I'm sure COVID-19 will stop reproducing at the news of an interest rate cut. I can throw out my hand sanitizer and masks now.
9
Ah yes, the old cutting interest rates ploy...the fed and
it's chairman are being manipulated by Trump to
secure his reelection.
9
Sooner or later:
> the man who built four casinos that competed with each other in a dying town,
> the man who squandered his father's huge financial legacy,
> the man who builds lavish golf courses during a contraction in the sport,
> the man who declared bankruptcy six times,
> the man that no reputable institution will lend money to,
> the man who built his fortune (whatever THAT is) on the backs of small contractors, trusting (foolish!) lenders, and a crooked manipulation of our tax laws (i.e. the REST of us),...
.... will run out of luck and we will be reliant on the instincts that 'accomplished' all of the above.
Feeling comfortable?
13
Just yesterday I read a piece in this paper from Wm. Cohan. The subtitle suggested that last week was a minor stock market correction and basically investors were really looking for a reason to take their profit.
https://www.nytimes.com/2020/03/02/opinion/coronavirus-economy-recession.html
I’m no expert in investing, but like many I have a 401-K and try to be patient with these market swings. I’ve also had a passive interest in business articles over the years and have read enough articles to not put too much trust in what the stock market tells us on a daily basis. Too often, voices from Wall Street sound like nervous Nellies in these stories – often a company reports good results and their stock price drops; or a company reports massive layoffs, and the price soars ("Ah yes, they're finally addressing their problems - you know, people).
I’ve liked Cohan’s columns over the years and appreciate his moderate tone and knowledge of investing. Yesterday’s piece discussed how a relatively minor market correction wasn’t a bad thing and ended with
“Jerome Powell should find a way to stiffen his resolve not to lower rates in the face of what surely will be relentless pressure from the White House. Then, when the fears of coronavirus subside — as they inevitably will — the financial markets will be in a much better place.”
Well, I guess it’s “poof” to that idea.
2
The Fed should have cut rates by 5% and then we would have cured cancer.
14
The problem is not lack of demand; it is disruption of the supply chain due to illness. Making it easier for people to buy things that aren't available solves nothing. This is stupid.
3
How ridiculous. The interest rate isn't going to help the economy when people are sick, plants are shut down, and travel and shipping is restricted!
6
We all see right through this sham! The Socialist GOP is giving more money to the rich!!
7
Can't push a rope, it doesn't work.
5
Why would the "best economy in the history of the whole world" need a boost? I thought more people were killed by the regular flu than the Coronavirus. We don't boost the economy on an influenza outbreak, do we?
Is it possible that the "Trump Economy" is as fragile as his ego? Is it possible that a boom built on copious debt can only be sustained by an influx of new, leveraged capital?
Here's to praying that the Trump economic team will self-quarantine before they can do more damage.
7
An interest rate cut is not the solution to a public health problem. If we solve the public health problem, the economy will recover. If we ignore the public health problem and try to stimulate the economy, things will only get worse.
502
@Jon
So true. The rate drop will not put products on the shelf if China is not producing them and companies will not borrow money for capital improvements if sales are uncertain. The rate drop may help some home buyers or people refinancing, but that won't put a blip in the stock market. I agree, solve the virus testing and preparation issues and the market will recover quicker.
31
@Jon The baby howled and was handed his toy. By the end of the day, as the markets continue to tank, he will see that the toy does not work. He will toss it away and howl for another toy. It will be interesting to see what that next toy demand will be. Perhaps Dershowitz, Gym Jordan, Mulvaney, Fox News, and the entire CPAC audience can provide the baby with their insight.
78
@June3 He has just called for another rate cut on Twitter.
8
Rate cuts help in cases where there is demand aggregation. They are not designed in this case which is about supply disruptions, and distribution chains. That being said, markets are panicky now, and rate cuts are like a shot of ativan or a few valium, allowing a reduction in anxiety and uncertainty. Although, of course, the uncertainty regarding the Covid-19 remain high.
1
Recognizing the impotence of rate cuts from already low levels is likely too much for a Fed already politically beaten up for not sufficient rate cuts. So is this just attempted exchange rate manipulation? - what the Chinese have long been falsely accused of doing? The ironies in the world of Trump just keep coming.
3
A cop-out cut by the Fed to assuage billionaires and the 1 percent. As if a 26,000+ DJIA couldn't absorb a period uncertainty. Instead, like corporate America focusing on their short-term quarterly earnings and Trump's tax cuts for the wealthy, put the onus on middle-class Americans to sweat it out even more.
6
I'm not an economist, but I think this was the wrong reaction. And half-a-point instead of the usual quarter-point? A wrong over-reaction.
No amount of steroids will keep the economy healthy if there is a global pandemic. What is needed is sound and capable public health policy. Of course that will never happen under Trump's leadership.
Looks like the market, after an initial boost, agrees. They are so far down for the day.
298
@SYJ "A sound and capable health policy." Good luck with that, my 80 year old mother has been in and out of hospital with a C-Diff infection which the hospital gave her when they put a patient from a nursing home carrying the C-Diff infection in the room with my mother. They can't even handle a C-Diff infection in NYC hospitals. Good luck handling a C-Diff outbreak.
In addition, millions of New Yorkers are forced to take crowded filthy breeding grounds for infection subways and buses daily. Only a matter of time when thousands of people are infected.
Wow. Gives rich folks and banks and corporations cheap money to buy more stock at a reduced price.
Wunnerful.
7
It sounds to me that Trump indeed controls the Fed. The only reason for this rate reduction is to bail out the Stock Market
How about instead of an Interest reduction we up the Federal Budget to supply much needed Healthcare and supplies.
It is insane the way this Country is now governed.
Ever since Trump has come into office the Stock Market has been told what to do by Trump and is comments.
It is time that the economists look at this with clear eyes, not the theories they all study.
3
Not exactly sure how lower interest rates will help the economy. If there is nothing in the supply chain then there is nothing to buy, nor a need to borrow money for anything.
Also with this reduction how can the Fed do anything to boost the economy when there is a downturn unrelated to the Coronavirus?
If there is a need to boost the economy how about a real infrastructure week since interest rates on 10 T-Bills are at historic lows? Borrow now to rebuild the infrastructure of the country. Roads, rails and schools can be rebuilt and improve the lives of Americans.
302
@Ronald Balter
Oh, it will help the economy....for a little while.
Lile 2 strong cups of coffee at 7:30AM give you a quick boost that wears off by 10:00AM, leaving you as tired as you were at the outset.
This is short-term stimulus with only short term impacts.
But, when we do need a serious stimulus, the FED will have exhausted its room to cut rates.
This is the kind of "instant gratification" that pleases a 3 year old.
DJT is our 3 year-old-in-chief!
66
@John B trump is the nation’s oldest toddler, so of course he likes sort-term solutions. They match his attention span.
26
@John B
In addition to using cuts in interest rates which leave very little room for future intervention, let's not forget that $1 Trillion plus budget deficit, brought to us by the Trump Tax Cut for corporations and the wealthy. The other tool which is helpful in a recession is fiscal stimulus through borrowing. With our deficit and staggering National Debt, how much more borrowing can we foist upon our Grandchildren?
2
This is all you need to know:
1) The interest rate cut will do basically nothing to help the average American (only rich Americans).
2) The Coronavirus does not care about interest rate cuts. Cutting the rate will do absolutely nothing to stop the spread of the virus throughout the country.
3) The Coronavirus is going to sicken and kill many Americans. Yes this will happen. And as the virus spreads it will adversely impact the American economy in many ways- slowing manufacturing, slowing travel, slowing tourism, people going out less to stores, car dealers, restaurants, concerts, movies, events, museums, wherever people gather and spend money.
4) Face masks won't save you from contracting Coronavirus. Washing your hands frequently will help but it is not a panacea.
Have a nice day!
8
@Gaston Corteau - Rate cuts really won't help the rich either. They might help a small number of people who are refinancing their mortgages.
2
Doesn't make any sense. Cutting interest rates doesn't do anything to help sick people get to work, buy more things, etc.
But this short-sighted political move does accomplish one exceptionally Trumpian thing - it hamstrings the next administration's ability to use rate cuts when they're appropriate.
9
Trump loved lower interest rates because he is in debt and ower interest rates allows him to borrow more and more. He governs similarly, tax cuts which much be offset by more borrowing. It's all OK because it's the American way to make future generations pay for our mistakes.
8
Within an hour of this un-needed rate cut the markets went up and are down again by 1%. Not only are rate cuts not going to solve the issues caused by corona virus, capitalists aren't interested in solving those issues or willing to invest to fight the corona virus much less grow the economy. And neither are any national states. No one is investing in serious infrastructure to deal with these kind of health problems. They are only interested in clipping coupons and growing their individual wealth.
11
This move is so typical of Republicans. Cut rates to stimulate the stock market and increase the fortunes of the fat cats, alias the 1%. Meanwhile, Joe Public needs more money in their pockets to pay for basic medical supplies and co-pays for visits to clinics and hospitals. Visits to the ER will devastate the finances of 30%+ of the people. God forbid that they have to take off from work because the greedy capitalists limit their paid time off. What we need short term is fiscal stimulus such as Federal re-imbursement for Covid19 medical bills and policy changes to guarantee paid time off for illness related to this epidemic. Long term, we need a better health care system.
12
By cutting interest rates and expanding the money supply, the Fed is artificially pumping up the stock market by expanding bank and corporate debt. This fictitious money is not being invested in production of goods and services or higher wages to give consumers more purchasing power, that would actually cause growth in GDP. It is being poured into stock buybacks, mergers and acquisitions, short-term speculation, and predatory lending, further enriching the top banks and corporations. Covid-19 is making people sick and killing them, decreasing production and trade in real life, and no amount of electronic money is going to stop that.
714
@Bruce Shigeura
A new mix of Huey Long and Ivan Grozny is what we need.
2
Raise taxes on the rich. Cut taxes on the middle class. Our country will blossom. What can billionaires do with all that money in a devastated world?
9
Dow is down 1.75% today.
This is what happens when you act out of obeisance rather than prudence.
Jerry, you're doin' a heck of a job.
9
Great, the rich get richer even during a pandemic.
8
I don't see how easy credit makes the Louvre (for a foreign example) or other tourist attractions reopen when they, like a host of other places that deal with volume foot traffic, closed to the public to guard the sneezing and wheezing that spreads communicable disease.
Cutting interest rates doesn't contain outbreak. Closing public places does. So does staying home from work.
And besides, the real issue here isn't this outbreak. It's the next outbreak of a mystery disease. And everyone should take notice of the colossal (and ironic) ineptitude that germophobe Trump, who squealed loudly about the ebola outbreak years ago, brought to the handling of the coronavirus now in question.
Seems to me, there's firmer consumer confidence and market confidence to be found in being able to reliably look to our national leaders for action, and not just see Bozo the Clown trying to make hasty work of a public message on what anti-outbreak efforts are being undertaken so he can leave to go to a campaign rally and call it all a media hoax spun with the Democrats' assist.
Nope, a rate cut won't fix stupid at the top.
12
A political "fix" for a biological problem. Staying tuned to see how that's working out...
9
Get a grip people. For perspective....3000 people have died since this started - same numbers as the regular flu strains every year. By comparison 4000 people per day on this planet are killed in vehicle related accidents. 4000 per day. And that says nothing of the 10's of 1000's who are injured and crippled for life. Every single day. You should be a lot more worried about getting behind the wheel or simply crossing the street.
3
Cynical, pointless and counterproductive rate cut by Trump loyalist Federal Reserve trying to prop up the imploding stock market bubble. Dow 18k by Memorial Day!
7
This is how Trump tries to wash his hands of Covid-19. Not going to come clean.
8
@Jeremy Drelich I see what you did there! :)
2
An ill-advised rate cut by the Fed to calm Trump's panic that the slumping stock market might hurt his re-election chances, a cut which will leave the Fed less equipped to deal with a real downturn when (not if) it occurs ... and a payroll cut for middle class wage earners, but only for ONE year.
Here's how to boost the economy: a permanent Federal law mandating a minimum $15 per hour wage. The only problem with that is that it helps people our government couldn't care less about.
17
@Gene Ritchings
And Health Care fr all.
2
I thought DT said our economy is the strongest ever. If that is the case, why lower the rate? And, as we speak, the administration is are still trying to dismantle the Affordable Care Act. I know people even today that avoid going to the doctor and getting help because they cannot afford to pay
12
Krugman et. al. can argue about the worth of this decision.
I find it very frightening in terms of the virus itself. If the government (and not just ours) is responding so strongly to the virus that argues that it realio trulio is a very serious situation.
4
This is definitely a ‘rearranging deck chairs on the Titanic’ moment. Anyway, who does an interest rate cut help? Only those with investment funds, not the millions who struggle to make ends meet.
22
@Kintamani Actually, rate cuts help 'the struggling' in most cases. By lowering cost of money, businesses can borrow at lower rates, streamline operations and keep people working, who might have otherwise found themselves at the unemployment office. That being said, this particular rate cut is, a bit ill timed, imo.
@Kintamani Trump wants to (have somebody else) shovel more coal into the Titanic's boiler.
He put Mnuchin in charge of the deck chairs.
1
The current headline:
"U.S. Stocks Whipsaw After the Fed Cuts Rates: Live Markets Updates
U.S. stocks rallied immediately after the Fed said it would cut interest rates, but those gains then faded."
Hmm, if a person knew this news in advance, they could make quite a bit of money.
Just wondering.
20
@How dumb do I look? Only if you had about 3 years of experience with options spreads or otherwise it's just dumb luck. Buy on fear sell on news is a particularly bad strategy for individual investors. Best to keep a variety of risks.
1
@St. Thomas
OR, if one knew what the Prez told Powell to do, and had the money to go in low and sell high, before Powell opened his mouth and took it low again. That would be called insider trading, maybe on too massive a scale to ever untangle it.
1
Oh good. Let's give more breaks to those who need it the least. So a few millionaires or billionaires lost some money on their mega-investments. How about some tax breaks and assistance to those on the other end of the economic scale? Those waitresses and retail workers who won't get a paycheck if things get worse?
14
I'm hoping to re-fi under better terms.
Take a little equity - pay of few bills.
Prepare for the worst. I'm far from an "elite".
1
@California
It will take a bit of time before the rate cut trickles down to the mortgage market.
2
@California You'll have to wait awhile. These rate cuts aren't for you, but for the banks and large corporations. The Fed is hoping the cut will prop up the stock market, which benefits corporations and the rich.
What good are low rates and more money when you are going to die from a stupid virus?
10
Isn't it rich that The Donald declares that the Fed was slow to act?
Perhaps I missed his sense of urgency back in January. Of course, then he was concerned about Roger Stone, crooked prosecutors, biased jurors, Adam Schiff, Brad Pitt and the movie "Parasite."
27
Took all of 15 minutes for market to start down again.
Sugar drink didn’t do much. Maybe if we hadn’t done the donalds bidding and put in 3 cuts in an upmarket?
Will be an interesting ride. I personally bought some Friday morning 10:30 or so. Expecting another new low later in week.
Overreaction?
Maybe, but a market on sugar and steroids is going to do dramatic stuff for modest reasons. And 10 yrs consecutive up, it’s on a cuspy line for sure.
11
The biggest takeaway from this story is this one true fact: The Federal Reserve cannot control a virus or the mindset of the public. Period.
As at least one commenter here has asked: “What does the Fed do after lowering the rate to zero?”
237
@LT A number of countries already have negative rates and I suppose the US Fed could try that, too.
I'm not sure how it works, though; does the central bank pay you to take their money?
14
@LT
“What does the Fed do after lowering the rate to zero?”
The fed will have to pass the ball to where it should have been in the first place--with the White House and Congress.
10
@Roberta Laking
Negative interest rates would have an especially bad impact in the US, in particular upon some of the very folks that are part of Trump's base. The level of our social services is lower than that in Europe, which has experienced this, and more middle and upper middle class retirees here depend on interest income from retirement accounts.
20
The Times should quickly get up another set of graphs.
Show the Market’s response to rate cut.
Followed by Market’s response to Powell’s Press Conference.
Looks to me like rate cut left market struggling to stay above yesterday’s close.
And Powell’s Press Conference should have a split-screen. As markets tanked as he spoke. And tanked further after he finished.
Plus, both events had no effect on virus spread!
9
@TheraP You mean that lowering interest rates won't stop covid19? Humm? Do you think it will stop the flu, or measles, or lower my cholesterol?
2
@Condelucanor
No. No. NO. NO!
2
Meanwhile, the Trump administration is STILL simultaneously trying to destroy the affordable care act / Obamacare.
Where will that leave vulnerable people who depend on it if COVID-19 becomes pandemic?
11
The admnistration must be really, really scared. I am betting that they know that the pandemic is already much worse in the US that they are letting on in the news, and that we are woefully unprepared and that they have no idea what to do. Sure wish we had another president! We all knew the day was coming when an outside event not caused directly by Trump would happen. But the fact that it would be a virus was not the event most of us anticipated.
9
The American Treasury has become Mr. Trump's Taj Mahal
Casino !
We already have a 20 Trillion dollar deficit dumped on the next 10 presidents, and our great grandchildren,
and now the Federal Reserve lap dog, Powell, has stripped our ability to respond to an economic catastrophe.
12
This is basically punishing people who prefer to save money instead of engaging in rabid consumerism.
9
Who benefits and cares about protecting the corrupt crony capitalist corporate plutocrat oligarch American economy from the coronavirus?
Who benefits and cares about protecting the healthy medical welfare of the American people from the coronavirus?
6
Fall 2020 headline, you read it here first folks:
Trump awarded Nobel Prize in Medicine for his research in “Persuasive 140 character electronic technique to encourage monetary policy changes to combat global pandemic”
9
Fed cut. Now what? Impotence and obsequiousness defined
10
Bankruptcy #7 will be Donald Trump's crowning achievement……..
He will break America………..
AND
It will be Obama's fault………..
You just can't keep a good "genius" - aka Donald Trump - down…………Unfortunately……….
9
But remember, it’s just a hoax.
Trump is going to wish the Senate had convicted him when this disaster is all said and done. Can’t you just hear him blaming another recession on his removal from office? Wah wah wah.
7
Uhh ohh .....Dow now plunging . Is it time for the second rate cut of the day ??
7
A metaphor I saw last year went like this: Interest rate cuts are like lifeboats in a recession. We've started using lifeboats before things are actually bad. Propping up an already juiced President is leaving us with less tools when then inevitable downturn actually arrives.
16
A political decision to satisfy one client. A real response would consist of a massive disbursement of funds focused on combatting the virus, aiding in preparation, and assisting those affected.
12
I doubt this has anything to do with the Caronavirus. This is all about Trump and political pressure. More free money for people who need it the least. The market was way over heated and a correction was predictable regardless of the virus. Algorithm traders likely made a fortune either ip or down.
11
Fed mandate is to promote job growth and tamp inflation. Which of these is at issue? Will lower interest rates keep planes flying with empty seats?
11
@Steve
Cheaper to fly drones attached to empty seats.
5
So with the lower interests, if we go out and spend more we will somehow be protected from the Corona virus?
16
Is there a company looking to make a move that is not sitting on a pile of cash? Have our historically low interest rates been holding us back from higher growth? Shame.
9
Slash budgets and positions at the CDC that deal with pandemics and cut interests rates at the Fed. The government seems to have its priorities a little mixed up here!
24
What are the cash-strapped families with a sick child supposed to do to avoid financial ruin? Those without the luxury of a stock-portfolio? Those without health insurance? Those who live in states where republicans doggedly insisted that there be no expansion of Medicaid? Have the republicans in Congress who have worked so diligently to fight any regulation of their benefactors in the Payday Lending industry made any calls for easing of their interest rates? Has there been a suggestion from Secretary DeVos that student loans payments or rates might be lowered for the medical workers who man the front lines in this battle?
Finally, the absurd idea that "we" want millions to die must be rebutted with this fact: The Trump administration deliberately made these cuts that have left us vulnerable. They were clearly warned not to do so but went ahead anyway. They were fully-informed of the consequences of a possible pandemic. They were told that millions could die. And this after years of attacks on Obamacare where they were repeatedly told how many millions would face sure financial ruin with a medical emergency. Republicans may say that they don't want Americans to die, but there's no doubt that they set up the dominoes that are starting to fall. For years I prayed "God Bless America." Now my prayer is "But deliver us from Evil." Vote Blue 2020!
27
Yeah, this is a category mistake, a sort of placebo to make the president feel something is being done on his behalf. This won't solve the existential disruption in global supply chains. And it won't serve as a catalyst to businesses and people operating under conditions of fear and panic.
8
@Rich
True. Trump is doing everything he can to ensure the economy doesn't crashland, but his toolkit won't have anything left if things really head south. If things work out, Trump takes full credit; if things DON'T work out Trump blames the Democrats and the liberals.
1
But why is the market still declining even after the rate cuts?
8
Please tell me how this rate cut will improve the economy? It helps the Trump & Kushner families because they are heavily leveraged. That's what I've been told.
19
Lower interest rates means easier payment plans for surprise medical bills for people who get quarantined.
3
@Helleborus
Bill collectors do not lower their rates. Nor do credit cards.
20
Banks, maybe?
1
Powell seemed a little agitated at the end of that speech. Of course we know trump leaned on him as hard as he could.
11
So the Fed cut rates. Now what?
Trump’s administration will talk about a tax cut. We’ll see it along with his health care proposal and his tax returns.
Trump and Republicans are complete frauds when it comes to taxes. They’ll cut rates for the wealthy, but they can’t stomach a tax cut that would only benefit people making less than $100,000 a year.
12
less than 20k, take home 12k annual
2
@fran
My guess is that you could use a tax cut or at least receive something from a stimulus. Any suggestions for the Trump administration?
Like the expression "when the only two you know how to use is a hammer, every problem is a nail". Is interest rate cut will not increase the number of flights, it will not make people go out and shop, it will not restart supply chains, it will not increase sales, it will be useless, and will steer fear on everybody because such cuts were used in 2006-2007 before the financial crisis and after 2001 terrorist attacks. Does this mean the fat beliefs the coronavirus outbreak is as important as a terrorist attack or a huge financial crisis? This is the way to go when you are incompetent.
6
@Ferrando I meant " when the only tool you know who to use ..."
1
@Ferrando
I bet you meant “...when the only tool you know how to use...”. (-;
Wasn't it Trump who complained that Obama lowering interest rates would hurt retired people? The severity of this malignant, pathological Narcissistic Personality Disorder should be obvious to anyone. It's not about people, not about America, it's just about Trump wanting to be reelected.
13
There you have it. Clear evidence that the FED will just do whatever the president tells them to do.
Another mini-bailout of the Wall Street fundes with your taxes adding to our debt.
No wonder why the young people of the country are fed up with the establishment. All of this will be the burden in their backs for the next 30 years.
Anybody who sees this and still doesn’t get outraged is blind.
19
Why is the Fed intervening to prop up trump’s reelection? Talk about corruption of the highest order. Throw out the whole corrupt administration.
Vote Blue No Matter Who.
26
From the cheap seats, this looks downright scary...
Been apparent for at least a year that the Trump administration has been trying to sync up record stock market levels with the 2020 election...
To a point, that's not a bad thing...
But – to the extent that his T-sec (yes, I know it was the Fed who cut rates) may be completely gaming the system at the expense of real private-sector growth, the inevitable further decline, based on impending 1Q20 results and full year guidance, may be even deeper and more disruptive following this the rate cut...
And – that we can allocate $ for tens of millions of (useless) face masks, while keeping the price of COVID-19 testing at extortionate levels, and hype-talk about vaccines and cures…
To a point, that’s not a bad thing…
It will be one more place where China – after we point fingers and smirk – leaves us in the dust, here, regarding public health and safety based on advanced clinical imaging and genomic diagnostics…
Which may finally get us past our nation-scale denial regarding our declining global standing…
But – to the extent that our fellow Americans may lose more jobs and more lives because of this pandering and thrashing…
Could we prevail upon some adult to run things – starting ASAP???
Perhaps some adult who brought some city-state back from the brink of chaos and bankruptcy???
PS
The tragic irony is if the increased liquidity further enables those who’ve begun shorting our economy, to continue…
3
1. The Fed is setting the real (nominal minus inflation) to negative value of greater minus 1%. T
"In January, the Consumer Price Index for All Urban Consumers rose 0.1 percent on a seasonally adjusted basis; rising 2.5 percent over the last 12 months, not seasonally adjusted. The index for all items less food and energy rose 0.2 percent in January (SA); up 2.3 percent over the year (NSA)"
https://www.bls.gov/cpi/ely
"Rates are now set in a range of 1 percent to 1.25 percent, as of the decision"
NY Times
The REAL rate on interest is the nominal rate minus the rate of inflation. The real Federal rate is now set minus - -1.25% to - 1.5%
That cuts out any further room to respond to a new crisis
2. Inflation is increasing rapidly in the US
Inflation has been rising steeply in the US from 1.7% in August 2019 to 2.5% in January 2020
https://tradingeconomics.com/united-states/inflation-cpi
It will increase further as supply lines dry up
The standard monetary response is to increase the interest rate, not to decrease it.
The Feds rate change is exactly the opposite.
3. Finally, the Feds action is a menace to Social Security, that by law MUST invest in government securities that return ever increasing negative rates.
9
@John Thank you for pointing this out. My wife & I have been discussing the same things.
1
So now trump can also bully the Fed into submission?
9
Now Trump’s wealthy friends can borrow at low interest rates to buy up underpriced stock.
12
The government is going to protect the upper class. The rest can, you know, just die.
14
Insanity! When Q2 and Q3 earnings tank because of supply chain issues, we’ll have no recourse to save if a depression throughout the 20s.
Global economic meltdown down coming because of bad stewardship of a bull economy.
6
So when do the credit card rates drop. People will be able to buy more toilet paper and Lysol if those rates drop. substantially. Other than that, why bother lowering them?
5
On Super Tuesday... no less! Coincidence? Methinks not...
9
The fed cutting interest rates is a meh move. It might help a bit in terms corporate borrowing. But the banks won’t lower rates on consumer loans, such as mortgages. A much more effective stimulus will be when the federal government starts spending.
Wait, what? The trillions in tax cuts to the rich and corporation has left the federal government with no money to spend on stimulus? Well, at least those rich folks and corporations reinvested that cash to strengthen our economy.
Wait, what? They squandered it on stock buybacks and third vacation homes and private jets and such? Well at least the country is being led by a competent president with the best for the US as his guide.
Wait, what?
14
Fed slashing rates will not induce confidence among the people, if any, it will increase the fear and consumers will stop spending. The shelves in the stores are already getting emptied. This is the time for President to inject confidence into the people. With uninterrupted lies by the President for years, it is impossible for the people to have any faith in his words. We the people, must pay for electing Trump as President.
6
All aboard! The train just left the station headed to zero interest rates! The Fed has no idea how bad the coronavirus will be. But as history has taught us the only remedy the government resorts to, when confronted with any problem, large or small, is to keep throwing money at it to make it go away. It never 'fixes' anything. But its a great way to pacify us! I may be sick, but hey, my 401K hasn't tanked, yet!
8
This is not sarcasm: I'm going to go apply for a refinance on my million dollar home now that rates are dropping again. I'll probably save a couple hundred dollars a month. So, personally I'm benefitting, but I fail to see how this in any way helps the Coronavirus response or the overall economy.
11
@Scott
Wrong. Depending on when you last financed, the interest to principal ratio on your monthly PITI payment will increase dramatically on the interest side and you'll be retiring the principal balance at a slower rate. Depending on several factors, it could be a dumb move financially.
5
@J Darby Respectfully, I know how to do math, and the difference between interest and principal. I can get a loan with a different term. Not every product is a 30 year fixed.
It'll be interesting to see what other central banks will do. The US Fed's move may well become known as the decision that took away its authority. Everyone with a little insight in the present supply chain problems understands that a lower interest rate does nothing to solve the problem; the only effect is that it gives the corporate class more time to run for the exits. Not only has the Fed given away much of its remaining ammunition. It has given away a much more important asset: trust. It'll be equally interesting to see what the stock markets will do now. Rational behaviour should result in a further rout.
12
"Trump reported five mortgages and loans on his 2019 personal financial disclosure at rates that tend to track the rates set by the Fed: the Prime rate, and the LIBOR. Together, he reported variable-rate loans worth at least $180 million. Therefore, the 0.25% cut in Fed rates will likely save Trump hundreds of thousands, if not millions, of dollars on these loans he has taken out on his business properties."
(Source: CREW)
17
The trough feeding by trump and his family continues unabated.
1
This is ultimately just an opportunity for T to lower rates. It has nothing to do with the virus. That is a public health concern requiring public health solutions.
But i guess now it will be cheaper for me to borrow money to buy masks !! (and if it happens to buoy the markets and lower retiree cash flow, well that's just an externality we will have to deal with)
7
The only thing this does is to crush savers. So much for earning anything on your cash savings or on bonds. All this to try to goose the stock market, yet the Dow has already given up the early gains. The reality is that the virus is going to spread and it's going to curtail economic activity for the at least the first couple of quarters of the year. No interest rate cut is going to change that. More helpful would be programs to support small business owners who may be pushed to the brink as customers choose to stay closer to home.
17
@Julie W. If you hold bonds they may be going up in value as it becomes harder and harder to get even a 1% rate of return on fixed income investment.
1
The coronavirus has led to decreased economic activity which ultimately must be reflected in the stock market. While dropping interest rates may boost the market in the short term, the net effect of one to three months of reduced output has to depress stock prices. The most effective way to stabilize the economy is to check the spread of coronavirus so that we can resume travel, school, public functions and rebuild our lives. To do this we need to focus on testing for the disease, finding those exposed and isolating them while the exposure runs its course. The stock market is a secondary issue for now. When the coronavirus has been stopped, and only then, will it be possible to grow the economy.
8
So, the invisible hand of the free market actually needs a guiding hand from the Fed.
Pure capitalism works only for the very rich. The rest of us could use some protection from their greed.
20
It is interesting that each the several talk show business pundits I heard this morning on television stated that the cut was likely to come in two weeks, at the regular Fed meeting, and that a preemptive cut would not happen now. Why, because it is not needed right away and the Fed should hold its powder for later since it didn't have much left to use. Doing it now suggests that fears of the virus depressing consumer spending are greater than anyone thought, at least in the eyes of our inside-baseball experts at the Fed. And maybe in part a response to Trump's incessant bullying. Is this why the market is not reacting with the glee expected?
13
Once again our government chooses to discourage saving and encourage borrowing or risky investments.
14
I thought the inflation I remember from the '70s was only a memory.
6
Reputable economists are predicting that the global economy may slow to flat or even negative growth in the first quarter because of supply chain disruptions and cuts to travel due to the virus. What kind of rate cut gets people back into airplanes? Back into hotels? How low do rates have to go to re-open schools in Japan and the 4 now closed in NYC? How do rate cuts in the US get missing parts from closed Chinese factories into US factories and stores?
All lower rates do is decrease borrowing costs for leveraged buyers on Wall Street and certain elected officials who are known to have personally borrowed hundreds of millions of dollars, possibly with floating rate agreements.
8
@Michael
Brother, this is nothing more than the rich bailing out the rich and filling their pockets in the coffers of the treasure.
Repugnant and corrupt.
No wonder there’s a lot of people who wants to turn to the left.
5
At this moment (11:15 a.m. ET) the S&P 500 is down 1.02%
Not up. Down.
But the S&P 500 was up 4.6% yesterday BEFORE the Fed made their announcemnt.
Am I the only one who wonders if yesterday's huge bounce in the US equity markets was a function of the privileged friends of our leader doing a little insider trading?
29
Why stop there. Let's actually give people money for borrowing. I'd like to get paid 2.5% interest back for a mortgaging.
12
Dow drops 100 points in volatile trading after Fed slashes rates to combat coronavirus” CNBC
One is forced to wonder if its the decision by FED or is it the masterful playing of the anxiety by the “market” manned by visible hands of a few corporates to rally the market . Why did the “market” react this way ? Does it want more QE? Is it asking for the negative interest?
4
What happens when the rate is zero? What does the Fed do then? How is cutting rates going to address the coronavirus?
This seems to me throwing a bone to the wealthier of Americans but does nothing for those who own no stocks. Given that savings rates are little better than zero, there is no incentive for those who don't own stocks to save. This kind of policy simply encourages people to spend -- and to do that on credit. The population just grows more indebted. And now with this new virus -- sick and in debt.
I hope the New York Times publishes an article that explains the Fed options and choices to its readers.
9
Central Banks are confronted with the reality that none of the structural economic problems, which created the 2008 financial collapse, have been resolved. Instead of allowing insolvent and highly indebted firms to go bankrupt following the 2008 crash, these companies have been allowed to continue functioning with infusions of circa $6 trillion of ultra-cheap money from the FED, which along with Trump’s 2017 tax cuts have gone to Wall St. for share buybacks, purchasing stock futures and to sustain [still] insolvent banks. This money also inflated bond markets and trendy real estate in Boston, NYC, SF, Seattle, etc. A vivid illustration of how dysfunctional capitalist economies have become is that the Bank of Japan (BOJ) is the largest shareholder on the Nikkei. Proper functioning of capitalist economies requires that unprofitable firms have to be culled from the marketplace, not repeatedly bailed out by the FED, BOJ or ECB. Global central banks are continuing their orgy of money printing and debt creation, ignoring the fact that continuing economic stagnation in the global economy is a consequence of excess capacity and slack demand. ‘Tough’ talk, more rate cuts or asset purchases does not resolve this problem, but rather is postponing the proverbial ‘day of reckoning’.
6
Irrational...because lowering interest rates can do what for companies whose production or service supply chain is limited or blocked, or their workers are can't get to their jobs to produce ? Just building a new wing on the house of cards.
This is more about Trump trying to preserve his premier 'great economy' message than anything to do with the well being of the American people or the country.
17
The FED? It is just another Committee to reelect the president (you know like the Nixon one).
Having already the Supreme Court as another important Trumpist puppetshow, it seem the US is lost for the democratic western world.
29
U.S. fiscal policy is now set by presidential political whim.
Interesting.
29
This is a nutso move. Make it easier to borrow money to develop vaccines? Chop logic at best
14
This move, combined with a reduced supply chain of essential components from China, has the potential to lead to increased inflation.
15
@paul
I don’t think wages or economic activity will rise as prices do. It looks more like a looming round of stagflation.
1
It would be nice if the Fed were to do what’s best for the country instead of what’s best for trump.
44
Past presidents wisely didn't interfered with the Feds to keeps some objectivity. This move is not from the Feds but Trump who now owns this, for good or bad.
Trump probably know it's going south no matter what, but now he's got his two fall guys (Pence and Powell).
18
OK, I'm a civilian but this makes no sense to me. Rate cuts are intended to boost spending, get people to borrow and buy. That runs directly counter to what we are likely facing: a shut down of schools and businesses of indeterminate length in order to contain the virus. Fed says, "Get out there and spend!" CDC says, "Plan to stay in, work from home if possible."
16
Trump has thoroughly corrupted the US Government. We knew he would bang on the Fed’s door for this but for them to acquiesce is shocking. It makes one wonder about kompromat.
He cares nothing but for the stock market and his re-election. He is going scorched-Earth on this. Hiding the Coronavirus, the massive impact on business it’s already taken, and the toll it’s about to take on the American public is his prerogative. The lack of testing kits could be by design.
China has shut down and travel has ceased. The world economy has slowed, now it’s a matter of how well Trump can reshape reality to his benefit.
16
What kind of fool brings an interest rate cut to a virus fight?
112
@D
This one gets the prize for the most concise statement of the problem. Well done.
13
@D
One whose ideology does not allow them to ask for direct, targeted federal funding where it is needed.
4
@D
Well said!
2
I don't see how this cut will work. The fact is that businesses will lose money in the real world because of reduced economic activity, restricted travel and supply chains.
12
OK, it's official: the Fed is now the servant of Wall Street rather than Main Street. Their mission? To boldly protect wealthy investors from inconvenient losses during every market correction.
33
filled with confidence now that Trump has taken control of another area of life. He now runs the Supreme court, the Justice Department, The Intelligence Departments (dimwits if you ask Trump,) Poor people will no longer be coming to this country thanks to our leader and his courts. And interest rates are under the control of a very stable genius. He's a Godsend some might say.
16
@kirk
Plagues are by definition godsends, too.
2
......nothing says 'intelligent' like cutting interest rates to contain a virus.
Its beautiful, even genius. So brilliant, it has never been done before.
We have this thing under control now.
24
So, in exchange for a healthy drop in stock prices, we've selected to keep over-valued stocks and homes inflated and in doing so used two rounds in our six-shooter. Let's hope that bear doesn't come around...
11
@Buck Biro
Trump is saving millions on his interest debt--that's all that should matter. LOL
Seriously, if the FED is doing an emergency cut of 1/2% that should signal that maybe this isn't the best economy ever.
13
@GI
Nothing Trump does is ever done calmly. Everything is done in blind panic.
1
The question on my mind is will the greenback remain the worlds reserve currency after this.
The US is running a deficit that is far outpacing its economic growth (4.6% of GDP vs 3.1% GDP growth in 2018, a good year) and running bare bones interest rates that are flirting with a nose dive into negative territory.
These are some pretty scary and umchartered waters that people should be discussing more and paying closer attention to. Id like to here more from people then 'it just cant happen'.
10
King Trump always gets his way. Only the American voters can stand up to Trump by voting him out of office.
28
@Milton Lewis
But do American voters understand that the Fed is manipulating the market in order to bolster Trump's chances for reelection?
18
@mls Not the ones in Trump's base.
So glad this administration is will to take such bold steps to protect us from this virus, up to and including, quickly cutting interest rates at the first sign of a dip, so investors don't lose money when people get sick.
19
America’s precious stock market - America’s soul - proves once again to be as fickle, superficial and insubstantial as its most banal celebrities.
Poor investors will suffer, rich will prosper and the game goes on as we all go down, whichever camp we fall into.
17
A ridiculously irresponsible decision. The stock market is being propped up by nothing but hot air at this point.
46
60K+ Americans died from the flu in the 2018-2019 season...where were the Fed rate cuts then?? This whole thing is a joke
24
@Dave S My thoughts exactly. This Trump/ GOP fueled panic via the media is nothing more than a cover for business as (is now) usual in US government.
2
Jesus Christ! I haven't earned interest on my savings account since 9/11!!
59
@John I stopped earning on savings long before that.
1
@John based on my 1099 I earned approximately 0.1% on my savings account last year. Just enough to hit MacDonalds for dinner for 2
1
After reading some of the hopeless comments, I'm gonna speculate that most here have no comprehension what a "rate cut" implies.
3
@Matt
Why don't you tell us, oracle of economics.
2
Wow! We are headings to financial collapse and it's not because of the Corona Virus!!!
6
What a dumb move. So little left in the Fed’s arsenal and this is the time they decide to use a precious part of it.
13
The king of debt and bankruptcy.
20
Headline should read: Jay Powell caves.
19
Fascinating Fed action in the face of Trump’s assertion that everything is under control and there is no reason to panic. This rate cut is a clear Fed interference in the election meant to artificially stimulate the economy to aid in Trump’s reelection. So much for an independent Fed. The real need for money is to help the uninsured and underinsured people cope with the coming medical financial crisis as the cost of drugs, containment and testing is being passed on to consumers. Fed rate cuts overwhelmingly help only the wealthy. There seems to be no limit to the greed of this administration. If people continue to vote for this corruption against their own self interests, then what comes next is well deserved.
20
In the Powell era, the Federal Reserve Board will be known as the DJT market prop board. A real virus, not the euphemistic kind of virus (contagion) economists are oft prone to invoke, is not raising a monetary policy question. COVID-19 churning through the population is slowing people's urge to spend, except for hoarders buying every roll of toilet paper in town. It is certainly not the cost of money why people are leaving their wallets in their pockets.
9
I’m glad the economy is vaccinated but what happens when the unprotected American consumers start dying?
16
The Fed gave a booster shot to Trump’s most important patient, the economy. If Trump can contain the market reaction, he believes his political operation will succeed, even if an unknown numbers of human patients die. If his plan of treatment works, maybe he will request another rate cut to address climate change. If the market is up, CO2 will come down...so opines a Trump’s denialist scientist embedded in the EPA.
Will the rate cut allow the international supply chain to produce and move goods and components from quarantined regions where factory production is curtailed? Will the rate cut spur tourism, with the prospect of quarantined stays on cruise ships with hundreds of infected shipmates? Of course, his MAGA rally attendees have immunity to coronavirus ( since they never would be caught imbibing Corona and Lime) but will theaters, concerts, sporting events and other large gatherings be saved by lower short term interest rates? Will fiscal stimulus give you enough comfort to send your kids to school, if the virus affects kids?
We need a plan, to be explained to us all, as to how the virus can be contained here and worldwide. But when the economy itself becomes sick, what fiscal remedies will still be available to stem that crisis?
4
@Asher Fried
Most important patient for Trump is not the economy, rather it's the stock market. For average American those are very different.
12
@JFR
Market is down over 300 after the rate cut...looks like a negative reaction to the booster shot....will his next cure be capital gains tax rate cut administered by IV?
1
So does this mean that working people who get sick, can't work and end up in financial difficulty will be able to go to the federal reserve and get a loan to get them past this?
Oh, the banks and credit card companies will get the (nearly) free money but consumer lending rates and practices won't be directly affected. Same as in the last recession?
Pretty slick for the rich and financially influential. For the rest of us, not so much.
14
This will make me feel so much better when I ride the subway later today.
13
This makes zero sense. There isn't a liquidity crisis in the markets. Most Fortune 500 companies are sitting on mountains of cash.
Pumping more money into the markets will only drive inflation which will hurt the middle class.
18
@Jim That’s the point, mate.
10
Propping up the stock market is not something that will determine the Coronavirus. But it is another deflection from the Trump administration's destruction of national health institutions.
18
This abrupt move by the Fed betrays lack of knowledge of stock market psychology. Looking at how stocks are doing today you would not think that anything of interest has happened (no pun intended).
The stock market psychology works on "buy on rumor, sell on news" principle. This is the reason there was a significant rally yesterday, and barely any movement today.
What the Fed should have done is give signals that they are about to cut interest rates, then give stronger signals, then even stronger signals, then cut interest rate by 0.25% then repeat for the next 0.25%. Markets would have rallied multiple times for each good news signal.
1
This diminishes and weakens a tool we will desperately need when things get really bad.
Lets face it, things are not terrible right now, but Trump and all his extremely wealthy friends are freaking out as to the reality which may set in. They need to perpetuate a myth that they are all wholly invested in, so an unnecessary rate cut has been rolled out immediately.
In the future, when the time and need comes for real action, the interest rate tool will not be as potent and less effective.
This seems to be a short term fast and furious approach when a longer term view needs to be taken. Especially when it has to do with the interest rates.
4
The Trump administration pushes for the public to remain calm and not panic, but then rushes to cut rates in emergency move - way to inspire.
25
The solution to the Corona Virus blues in the stock market is not interest rates-it is uncertainty about the extent of spread of the virus and how much disruption it will cause for companies and their bottom lines.Trump has been promoting interest rates near zero since his election and has disparaged the Fed because they would not do his bidding.Now the Fed has preemptively cut rates before the picture is clear-it forces people who want any return to get into the market which will probably lose them money-anyone who wants safety has to stay in cash.Trump and the Fed are pushing stocks even though that may be disastrous for investors.
6
A very confusing move of unclear benefit in the face of an epidemic. Money is already cheap, and this seems more intended to prop up the stock market - which is not the economy as we’re constantly reminded. But I guess the angry tweets will subside for a while.
15
I have an idea...how about we offer Student Loans at the Fed Discount Rate! If we can subsidize banking, surely we can subsidize our future work force.
133
@MrsWhit Unless trump comes up with a family owned student loan company that he can make a killing on I do not see that happen...
5
@MrsWhit: What a capital idea! Index student loan rates to the Fed Funds rate with a cap at the average rate from 2008 to 2020.
4
This was a move by the Trump Administration to drive off the Stock Market Shorts. Dow 30 index was down over 300 points this morning before this announcement was made after the market opened. It won't help long term because the rate cut is a symptom of grave concern about economy.
If only the Trump Administration would show this much interest and care with all American Lives.
29
This interest rate cut lifts the stock prices long enough for the elites to sell at a higher price. When, unfortunately, many people are sick, dying and in isolation, the stocks will fall again. But, by then the elites will have been able to mitigate their losses.
Its too bad that the administration dismantled the procedures that Obama put in place to lift the effects of a global pandemic. The previous administration would have been advancing testing even though Republicans would have decried it as socialized medicine.
19
Although in the US, we don't care for people but for corporations, there are some things that could be done to prevent a recession and will benefit corporate America as well:
1. Governors and Mayors of cities that have corona virus cases should encourage employers to have their non-essential employees telecommute. Most employees have this capability.
2. The same state and city governments should set the example by requiring non-essential staff remain home. This is done during snowstorms and hurricanes, so there is precedent for this.
3. They should also cancel functions where many congregate.
Some of us have sick leave, have insurance and have less risk of getting seriously ill or dying from this virus. Others don't, and government needs to step in. At the end prevention is less costly, can save lives and help against a recession. So the Federal Reserve can get some help from elected officials to protect what is most important, corporate profits.
9
Wrong move at the wrong time, an over-reaction to what might still turn out to be a short-term issue.
When a real recession occurs, hurting demand rather than supply, the Fed will have no more arrows in its quiver.
But by then Trump will have been re-elected, so...don't worry, be happy.
13
@alex
All too true. But Trump scares me more than any flu epidemic, which are predictable in their rise and fall. Not Trump. He'll do and say anything to keep the applause and the spotlight centered on him, regardless of consequences.
Fed slashing interest rates is timely and in appropriate order considering the panic selling last week on wall street, travel industry taking a hit and those with supply chains dependent on China being adversely affected. The markets should also feel euphoric that the contagion of Soviet style socialism is not coming to America any time soon if ever. That could though change with super Tuesday results this evening when polls close.
3
Powell has shown no backbone in standing up to Trump. This will be a supply economic slowdown - not a demand slowdown- thus a rate cut makes zero sense.
31
Trump only has one arrow in his quiver but how does a rate cut help supply lines, tourism, hourly workers, spending? Seems a bit of a broken record at this point.
15
More than rate cut is needed; chart a new course and do not repeat the mistakes of selfish business people. Jack Welch surrendered GE to China. All corporate America followed and sold out USA for short term profits. But trade with China is suicide; we build China’s empire and fund their military which is aimed at us. Wake up people.
7
Not the dumbest thing I have ever heard, but right up there.
13
Good...more socialism for the rich, while our grandchildren are saddled with paying the exploding debt that finances rich rent seekers.
33
@Daniel Lake You do realize that the US debt will never be paid down. The current US debt basically makes the US insolvent. In fact the US hasn't had a sound monetary policy since the Clinton Presidency.
7
What a horrible move by the Fed. Interest rates are low enough to encourage borrowing. If a business can't make it with rates where they were, then they need to close their doors. None of this is going to trickle down to consumer debt, with the maybe benefit to long-term mortgages, which already are low.
11
Well, here we go. We have not yet even slid into the recession and the Fed has already done the deed, under pressure from the Country's leading expert on how to go spectacularly bankrupt, Trump. This might have been a good preemptive move if the rates were much higher to begin with, but as it is, it'll only be a temporary boost. When we slide into recession the Fed will have nothing to fight it with. And this mess is squarely on Trump's shoulders. I hope he suffers the political consequences of his mismanagement, for a change. But I doubt it. Accountability isn't exactly his thing.
58
@Brannon Perkison
Nothing even remotely suggests a recession on the forefront.
1
@Matt Many factors suggest a recession is imminent and getting more likely every day, tipped that way by the Coronavirus which is now disrupting supply chains and services around the world. There was a good article in this paper about it just yesterday, but even before the virus, we had Europe slipping into recession, a Brexit that is almost certainly going to be disruptive, the unnecessary tariff war dragging us down, huge national debt, manufacturing in decline, the reverse T-Bill indicators pointing the wrong way, a huge corporate debt bubble, the list goes on... We were holding in there because of a good job market and high consumer confidence--but many of those jobs are marginal and low-pay service jobs, easily disrupted by almost any hiccup. Well, this could be the hiccup. Consumer confidence could plummet easily and we are unprepared. It's exactly like Obama used the Fed like a credit card to get us through the first recession and Trump, instead of paying off the credit card, just took out more credits. There's no where to go from here, except down. We might make it through this current threat with sound financial management but that's exactly what we're not going to get from Trump, the bankrupt King.
6
@Brannon Perkison
Rates would have been much higher if the economy had fully recovered from the 2008-09 crisis. In terms of income and consumer savings/financial resources, it did not.
3
Has the Fed become Trump's new Deutsche Bank?
123
Let’s not forget that trump is the self-professed “king of debt.” Lowering the interest rate helps him bigly.
37
bringing an interest rate cut to a coronavirus fight. say what you want about trump. he's all about the dead presidents.
9
Dear Leader only cares about the stock market, even though it does not represent the economy. Good to see that his constant pestering to cut interest rates will stop Coronavirus in its tracks.
7
You gotta love it when those in charge start to panic. Makes you wonder how we manage to survive.
6
like putting a band-aid on a gunshot wound.
15
Of course, isn't this is just helping the little guy, right, that depends upon our paltry savings to survive?
Of course, this isn't about the wanting further tax cuts for the businesses and billionaires that need it more, than the little guys, is it?
And I recall just reading that they want to us to send some of our health supplies to China to help them out, while China withheld the truth, and we still don't have sufficient supplies to protect us, or do we?
Is this fairness or is it hypocrisy?
6
@Quandry
The latter.
1
The American Rasputin works his magic again. Another semi responsible, independent person/entity becomes a stooge.
6
The rate was cut for trump, not for people!
18
Great news for anyone who needs to take out a loan to pay for their coronavirus hospital bill. Stave off medical bankruptcy for about a year.
18
The Fed's action to cut rates is an act of futility. It will be totally ineffective. And, if by some weird circumstance it was effective, then it would be counterproductive to fighting the spread of this China virus.
Rates are cut for the purpose of stimulating consumption and business investment. But consumption will decline substantially because of precautions most people will take in order to protect their health. Does the Fed seriously believe that lower interest rates will stimulate people to borrow to spend when spending exposes them to increased interaction (and the increased virus risk that accompanies interaction)?
And, if the lower rates did stimulate people to increase their economic activity, then virus spread would be assisted by the concurrent increase in personal interaction with the public.
7
So according to administration propagandists like Larry Kudlow the economic fundamentals are strong, but the Federal Reserve just lowered interest rates on an emergency basis. Which is it? Is the economy strong or are we about to experience an economic catastrophe? Inquiring minds would like to know.
9
Negative interests are around the corner.
Whatever negative interests really are, who knows.
8
This is absurd pandering to a childish market. There is no way that interest rates will fix anything here. The real economic issues are driven by facts on the ground. No one is traveling. Workers in some places have been in quarantine for 6 weeks, etc. There are real supply chain and demand side issues. None of these things can be helped by lower cost of capital.
We need to stop subsidizing markets with unrealistic rates.
70
It was merely an action not supported by enough facts. Companies feeling the pinch are mostly in the manufacturing sector. Due to slowdown in China & elsewhere, an inventory is piling up - so, no point in borrowing money to speed up the production rate - albeit lower interest rate. Its likely, if the credit offtake rises after this cut, the stock market might be the beneficiary - that's FED...
5
Lifted the markets about a tenth of of one present.
Woo hoo
7
Cutting interest rates is like showing up at the Battle of Stalingrad with a bow and arrow, and the arrow is tipped with a suction cup.
23
This is stupid. All this rate cut is doing is propping up Trump and coupon clipping capitalists. The economy was supposedly massively stimulated when Trump and the Republicans gave a tremendous tax cut to the rich, who immediately used their savings to buy back stock and NOT INVEST IN THE ECONOMY.
Now they want easy money?! Want to stimulate the economy. Hire the 50,000 jobs that are needed in and around the medical sector to combat and keep combatting things like the corona virus. Re-fund the public health sector.
I agree with other commentators, the main effect of this cut is pump up Trump for the November election.
53
@LarryP
This won't have much impact on actual "coupon clippers"
CCs are folks who have bought a bond with a fixed rated of interest and clip their monthly coupon to collect their dividend at the bank. Of course, in 2020 this is usually an electronic process.
But, the point holds. The classic bond holder who lives off dividends from fixed rate bonds feels no impact from this move.
If she has $500,000 in 3% 30 year bonds, she collects $1250 a month ….. regardless of what Donald and the Fed do. At the end of 30 years she gets her $500,000 back.
Her only risk is that the issuer goes bankrupt. If her bonds are US Treasuries, this is considered an unlikely risk.
2
Fed to savers: DROP DEAD
150
I thought this was all a hoax.
65
ReFi before you Die!
4
@California - Last week I set up an appointment for tomorrow with my credit union to refinance. Yea me..
1
Obama - 350 BILLION/4.6 trillion in total bailouts...
Let EVERY exec off the hook.
ZERO percent interest from the fed in office.
End of story...
2
@Bless Dog You're right, it seems to have been a pretty successful response to lead to such a long recovery.
8
@Bless Dog
No it's not the end of the story. Obama cut rates to address an economic crash and revive the moribund housing market. Trump is pressuring the Fed to lower interest rates to buoy up the stock msrket. You apparently can't see the difference and never will.
20
@Bless Dog Obama rescued financial meltdown from Bush and created economy now trump take undeserved credit. Trump already created trillions of deficit, including billions of funding for farmers who suffered from trump's unnecessary tariff war. Trump's economy is nothing but tax cut, bully, and rate cut. He has been bullying Fed into multiple rate cuts, including this one, to pump up stock market. The stock market is just like an overblown balloon, a touch from a small needle will be catastrophic.
14
I thought I had a novel comment, but it appears that everyone has the same idea. The economy has been doing well, but with a trillion dollar deficit and interest rates at historic lows for a non-recession. What I'd like to see is Democrats screaming that the economy is being rigged for Trump's reelection, but they're too dumb. God help us when the recession hits.
24
@rawebb1
Democrats are not too dumb to notice or to call it out. The dumb ones are those who continue to support Trump.
1
How are interest rates going to stop a virus? Does corona want to play the stock market?
22
This is to help prop up the oil sector and real estate of course. The fed will just print more money. Propping up Trump and Wall Street is all that counts. Hows does this help middle America?
16
I don't anticipate this cut being reversed any time before Nov. 4.
12
@McDonald Walling I would not be surprised if there are more rate cuts before Nov. 4.
@McDonald Walling
Lol. You can mint money if you find anyone dumb enough to take the other side of that bet.
Looks like the Fed is bent on handing Trump another term. Shortages will stoke inflation while the world slides into recession. But the stock market is rallying.
16
Withdraw your money from the market and put it in FDIC insured cash. Everybody. Altogether now.
10
On behalf of retiree savers who have cautiously invested in savings accounts and CD’s, thanks for hammering our investment returns so that you could artificially inflate the stock market.
89
@Pedro Nothing is preventing you from investing in stocks. It seems to me that even retirees can benefit from having some of their assets in stock index funds.
1
@Spike
Those many retirees with $100,000 or less in savings, living on the 1% interest they're earning and social security cannot bear such risks, as the recent 3000 point drop indicates.
20
@Spike
I'm no economist and have had to define the Fed interest rate cuts as:
BAD for savers; GOOD for investors.
I'm a 66-year-old retiree with zero tolerance for risk. The recent fluctuations in the market would've put me in a padded cell. So, my meager savings are in CDs which are offering abysmal interest rates.
I suspect that a lot of older folks are in my risk-adverse group.
NOT my president
11
If we have a recession there will be little left to promote stimulus, then what? Rushing to try and keep short term stock market at a record high price-earnings ratio is a fool's errand.
The market is overvalued so that Trump can make claim, during the election, that he is responsible for the stock market "success." He will also be responsible for a long recession that the government will struggle to have the power to overcome.
This is short term gain for long term pain in the service of Trump's interest, not the country's.
18
“In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.” Not to mention shoring up Wall Street to protect the president's reelection. Another "independent" government agency caving to his demands (or else).
9
Such a weak move. They should have cut by 2 - 3%, at least. Make that 5%. Go big or go home. If you're going to something useless, may as well make it look strong.
1
@ben You really know nothing about the Fed and easing rates. Read history.
2
@ben
The 10 year Treasury note is already at 1.10%. You can't slash it any further. Retirees whose CD's are maturing will see even lower rates. This is just Trump's pressure to encourage savers to take their money and invest in the stock market.
5
@Alan J. Shaw I wish you were right. But I think you should expect to see negative rates in our lifetimes. I'm not saying this is a good idea. I just expect the Fed will end up there at some point, and maybe soon.
1
The most vulnerable....the elderly. Both to the virus and the Trump Fed.
22
Typical GOP for last 30 years. Lower interest rates before we have issues to fluff the market. So donnie can puff his chest. Now with interest rates already pushed down to inflate offshore accts and egos we cut again.
Who does it help.
The gilded set,
Save our stocks.!!
Puff up Tesla, We work, internet funny money.
Puff up real estate investors. Cheap money BABY!,!!
For the 95% and below it does nothing.
Now when the downturn comes we have no ammo, tax cuts, interest cuts, rescue the poor little rich folk.
15
Better headline: Fed Slashes Interest Rate in Emergency Move to Prop Up Trump Re-election
140
Why is free money ok and free healthcare isn't?
212
@Donna healthcare is free? When?
3
Excellent question, Donna, will not be addressed by this or any other newspaper.
7
@Mike Donna means free at the point of service. Imagine not having to worry about getting a $200,000 bill from the hospital in the mail bankrupting you. Less stress, more healing.
11
Wonder what happens when we're inevitably sitting at 0.5%, and the next move is to 0.0%, then into negative-land?
Weird enough for you, yet?
Ha!
-C
4
Interest rate cuts won’t do much for the people likely to be laid off, quarantined, or sick.
It’s just another welfare avenue for large corporations, private equity and others of the new robber baron class who, thanks to Citizens United own the government.
Far better to put money directly into the hands of those most effected.....not fat cats who lay them off.
15
Americans are dying! Quick, save the stock market!
22
When you elect a carnival barker fraud artist to the highest office in the land, expect extreme actions to mask that the fraud artist is completely incompetent and hopelessly clueless.
Maybe Mike Pence can help pray away the incompetence.
20
@Christopher
AMEN!
6
@Christopher The Emperor isn't wearing any clothes!!
2
Fed rate cuts are not likely to solve any real problems from the virus. Will the Feds be willing to remember the cuts given in the name of the virus and raise the rates back up by the same amount when the virus problem is solved down the road?
7
@nat
Answer: No. We just came through a frothy 2 years with the market in overdrive and what did T do at every dip? Scream at the Fed to lower the rate. He's utterly ignorant about economics.
3
Now we need a tax cut! I can't wait to get my "Free Stuff!" For hurricanes they give out free paper towels. Any time there is a threat to their treasure they hand out "Free Money."
9
This is plain and simply a bad decision by the Fed. So we are going to what .75% to 1.25% borrowing rates now? Do they really think that the Federal Government is going to stop deficit spending? What happens when you try to go on the open market to sell Treasury Securities at these low rates? When we have our next recession, what is the Fed going to do then, QE? If that is the choice, rates will have to go up and can't go down. I wish people listening to POTUS will turn around and let him know that when he speaks of negative rates and restructuring our debt that what he is saying is that we who own the debt in our 401K's and pensions through investing in Treasury Securities are the ones on the short end of the stick.
10
It is frustrating to see the feds lower the interest rates to provide cheap loans to real estate barons and wealthy prospectors, when what we need is an umbrella for workers and the uninsured seeking care for the coronavirus.
What would get us through this epidemic is ASSURED pay and health care for those sick or quarantined. However, our government and our leaders get it wrong every time. This is why Bernies Sanders and Elizabeth Warren resonate with the public. If people are sick and have no sick leave with shoddy health coverage, the economy will cave anyway. The stock markets will temporarily roar with cheap money, but the lion share of us will be suffering.
11
This overly dramatic move by the Fed is entirely unnecessary, and will leave them with little room to cut rates further when and if the economy really turns down. Knee jerk economic reactions such as this rarely have the desired effect, and they almost always end up having the directly opposite result to that which was intended.
369
@paul
Agreed. Cutting rates is simply to assuage investors, a cosmetic tool to help keep the markets from tanking. Cutting rates will do nothing to restore global supply chains or reopen factories in China, nor will it get people to travel. Cutting rates by this much only removes another tool from the box. There are not many tools left.
17
@paul drama is in high supply in the Trump admin. It’s like a bunch of dumb high school kids running the country.
26
@Corrie:
Whoa there!!!
What's with dissing teens???
Even the average H.S. freshman has considerably more on the ball than the Toddler-in-Chief!
8
I remember when Georgie W's reaction to 9-11 was to order Americans to go out to the malls and spend spend spend.
Consumerism is a biosphere-killer. The constant push to get us to borrow and spend more is reckless.
It also shows that the capitalist economic model is similar to the operating principle of cancer cells--growth for the sake of growth until you kill your host.
Notice that with air flights decreased and factories shut down due to the virus, scientists are immediately seeing a reduction in pollution and climate change greenhouse gas emissions.
10
Cutting rates is going to do very little to mitigate the damage of an exogenous, supply-side shock. The interest rate on a non-performing loan is a side consideration. Liquidity is not the problem, cash flow is. Idle concerns clog the flow. The Fed wasted ammo that could have been better used in a different kind of crisis.
10
The Coronavirus will outlive short-term monetizing and juicing the Economy.
This is a political stunt to protect those with wealth in the Stock Market, not about Public Health.
8
sure, whatever you can do to keep the stock market bubble artificially growing...did someone say irrational exuberance?...the gift that keeps on giving to the upper 10% (yes, I know there are some lesser mortals that may be lucky enough to have a 401K who may see a small bump, but really just peanuts compared to the upper 1%-10%, and, of course, nothing for the poor savers...
16
This cut is probably too large and too soon.
We don't have much space left for future cuts, yet the prospect of really serious economic contraction and recession looms.
Trump wanted instant gratification, and the Fed gave it to him.
As always, Donald sells out the medium and long term in favor of the short term.
This is no way to run a railroad.
38
This protects us from coronavirus how?
14
The independence of the Fed is essential to maintain stability. Trump's pressure to regularly keep rates unnecessarily low (remember he borrows a lot) would give the Fed little room to adjust to market disruptions. Getting into negative rates, historically, presents almost insurmountable obstacles to national prosperity.
23
So, the "greatest economy in history" cannot function without being propped up by printing money (quantitative easing) and giving nearly free money to banks (The Fed).
Yet, credit card companies are now typically charging 12-15% over the prime rate to us peons.
Isn't it time that we, the people, re stack the deck?
88
@BJ Kapler the interest rates are based on risk of the borrower. Don't get a credit card if you don't like the borrowing rates. Simple as that.
2
@Mike Not true, Mike. My FICO score is in the high 800's, yet interest rates keep rising. I pay my balances every month. And savings banks want to pay 1% interest (if you are lucky), discouraging saving.
8
@BJ Kapler
They keep rising because that's what the feds were doing with the reserve rate over the last several years (until they started cutting them recently). Your interest rate increases/decreases tie to the fed reserve rate.
I apologize for my stupidity, but I need a stock market lesson. Why does the government insist on baling out investors in the stock market. I have always believed the market is not much different from gambling. Investors are gambling on what the public thinks about a particular stock, with opinions often having little to do with the company value. Funds earned by the company are not used to grow, but instead line the pockets of the the owners and officers. Isn't there something very wrong about the intervention? The majority of Americans do not own stocks. How does any of this help them?
30
@Disillusioned indeed you do.
Stock brokers own the companies; hence, that is whose pockets are lined. A decrease in stock prices plummet people's 401K's and revenue they use to live off of, which then decreases spending.
In order to maximize revenue, businesses will then cut back further on wages, hours, benefits, etc. which affect everyone.
2
@Mike My 401(k) accounts are not in the stock market?
1
@Disillusioned
The majority of Americans do own stocks - whether indirectly or directly. A school tearher's pension in in the stock market. A pipefitter's 401K is likely in the market. Grandma's IRA is in the market.
Now Trump isn't really thinking about those folks, but they are part of the equation.
3
this makes no sense at all except that Trump wants to artificially pump up the economy before the November election. He doesn't care if there is a crash after that, and he would prefer a recession if Democrats win. I can't believe the entire government and Republican party are going along with it. We must be sure to hold them responsible for the result of this irresponsible act
46
@Patriot Of course he wants to pump up the economy. Look what he did to the Midwest farmers....got into that stupid trade war which crucified the farm markets, then gave them MILLIONS (billions?) of dollars to subsidize them. Will they still vote for him?.....Of course!
5
People may die because of Trump's default head-in-the-sand scientific reasoning, as well as his ill-prepared and ignorant response team. Pence, really? "Genius," really? You can't make up this idiocy.
Ah! But cutting interest rates to support big money and the markets? That's different.
Trump, his fellow plutocrats, and all their minions will always choose the love of money over the love of living beings.
8
As always, it’s about falsely propping up the deliberately overheated economy until the election.
It’s like getting a pedicure, when you’ve actually broken your leg. But, hey, pretty toes...
16
Palliative (adj.): relieving pain without dealing with the cause of the condition.
That exactly describes cutting the interest rate. So the markets go up, but their current inherent disconnect from the real economy goes on. It merely postpones the inevitable collapse.
Don't worry about he coronavirus, folks. Just keep your eye on the Dow.
10:35 EST, 3/03
31
@mancuroc
..... and now, only an hour or so later, the Dow is down. When the palliative remedy only works for a short while, that should tell us something.
11:45 EST, 3/03
2
Ok so interest rates have been cut another half percent. That leaves two or three half percentage points to go before there is nothing left to cut. What then? And why does Trump keep bullying Powell for acting "too slow?" He can't reopen Chinese supply chains or factories in China. He can't magically fill our empty seaports with ships bringing the parts and goods we need. And he cannot force China to keep buying American soybeans to feed the 2 million Chinese pigs that have died of African swine fever.
496
@Christy negative interest rates.
11
@Christy what happens next is rates go negative. In other words, lenders start paying borrowers.
Good incentive to take out loans but absolute hell on the savers and banks. Its not the first time this has happened in the world but it would be the first time in American history.
54
@Christy
"And why does Trump keep bullying Powell for acting "too slow?"
Partially, to gain influence over fed policy. But primarily, because trump is nothing without some enemy he can bully to the delight of his fans. His loud battles against his insecurities make those fans less worried about their own.
...Andrew
84
The rate cut is not for the working people it is for the stock market and Trump.
The Federal Reserve works for the rich.
The retiree who was told to go at least 50% in bonds gets no return. The savers get no return. But, the hedge funds are ordering more champagne.
and the people? they have been brainwashed to fight each other over social issues while their government and Federal Reserve works only for the rich.
261
@Zenster it does help the middle class a little bit. Your $50,000 in credit card debt now has an interest rate that's half a percent lower; thus, lowering your payment.
2
Quality comment.
6
@Zenster
Welcome to the new dystopian REPUBLICON COUP.
5
If only the trump administration put as much effort into fighting the Coronavirus as it does propping up the stock market.
39
I feel so relieved. The one percent get to stay wealthy and the virus marches on.
35
How will they lord it over the little people, when we are all dead of coronavirus? Who will watch them on tv as they travel to their fancy whatnots and their many sparkling whathaveyous?
Cutting interest rates at this point is "pushing on a string" as they say. Companies, seeing a potential health crisis coming, are going to hold off on investments, expansions, hiring, etc. A lower interest rate isn't going to change that.
Seems like the Fed is now a tool of the Trump administration as well. Cutting interest rates does help prop up equity/bond prices and boost corporate earnings, by cutting corporations' borrowing costs. So, yet again, the rich get richer, and the non-rich just keep getting the raw end of things as usual.
Meanwhile, don't do any meaningful testing, so no one will know how widespread the pandemic is becoming, and try to bury any/all evidence of that for as long as possible -- well, at least until the Nov 3 election. If more people die in the meantime as a result of the government's purposeful neglect, who cares, thinks Trump and his henchmen.
Please vote on Nov 3. Our democracy's future is at stake.
53
@fact or friction
Friction...our lives are literally at stake. Guess what day the primaries are in Florida? St. Patrick's day!! If you live in Florida and have requested a mail-in ballot for the election, You've already received it in the mail, TEN MONTHS EARLY!!! They were mailed out in January.
At my wife hospital they need test kits. does printing money make them available or cheaper?
Wall Street is the only patient that is receiving lots of care here, which might not necessarily work, considering the supply side nature of whatever slow down they are worried about.
43
Always good to know that the administration is looking out for Wall Street, while American citizens are literally dying from a highly contageous disease that Trump says may go to zero cases in the next week or two. It will be a miracle!
I'm very interested in how the Vice President will try to downplay this the next time he tries to use his dulcet tones to say there's nothing to worry about here. That only a couple of states have confirmed cases and that Trump and his Fed are looking out for all of us.
41
Great, now businesses can borrow more to bring more workers out of their homes and into workplaces.
At least the investor class is being protected.
Paul Volcker is rolling over in his grave.
29
@John and the interest rates on your debt are reduced by 0.5%.
Maybe. Depends on the type of debt and terms on the note.
1
@Mike There are two sides to every coin. Interest I receive is now reduced. Or do you believe that people should not be paid interest to loan money? One can get paid to rent out an apartment or a car, but not to rent out money?
Ah, capitalism. Such a great system where we have to manipulate things to make it work.
43
@Jim C
The biggest threat to American capitalism isn’t Bernie Sanders. It’s American capitalists.
10
As usual, Trump moves late on helping people deal with this virus but quickly to protect his financial backers.
172
@TR Connolly And himself (debt) and Wilbur Ross (vulture).
5
This will be remembered as a critical error early in the response to this viral crisis. The technicals and base fundamentals don’t look good for the economy in the coming year, interest rates won’t turn global trade back on. This is applying a band-aid on a severed limb.
87
"Central banks cannot keep the disease from spreading, prevent workers from losing hours at work, or mend broken supply chains amid factory delays."
What universe are we living in thinking this action by the Fed is appropriate?
100
@Lee perhaps the 5,000 point Dow drop last week? Wow, that was hard to figure out. I guess you want a recession AND a disease epidemic at the same time.
The markets were looking for an excuse. Sick people who are concerned about how to pay their medical bills are going in cruises and buying cars and other nonsense. Be honest here, this is about buy backs and more cheap debt for corporate. Forty-five has hung his entire worth as POTUS on the performance of the market.
5
Stupid, stupid, stupid. The job of the Fed is not to shore up stock prices. This is POSSIBLY a supply problem, not a demand issue. What will the Fed do when there is a recession and unemployment goes up? What tools other than quantitative easing is at their disposal?
103
@Julie
That's pretty much the entire tool kit.
-C
7
@Julie
At that point, the only tool will be direct, targeted federal stimulus. Could it be that a major part of the reason the fed has limited room to act is that, in terms of consumer income and spending, the economy never fully recovered from the financial crisis of 2008? At the end of 2007, the prime rate was at something like 4.5%. Despite a couple of attempts to start raising rates, the fed has not bee able to get far. Seems consumers might not be able to afford it?
1
Well, that's nice -- now I'll be able to refinance my mortgage at a lower rate. But what does this have to do with the virus? I think it would be better to let the economy react as it will. Nothing like falling markets and a shaky economy to keep public officials' feet to the fire. If they settle the markets down, he-who-shall-not-be-named will figure reelection is in the bag, and will go back to insulting everybody, appointing incompetent cronies to sensitive posts, and shutting down agencies that could protect us from harm.
55
@Stevem
Go back to?
When did he stop?
1
The last I looked, the Fed cannot do anything to control the virus, but they can direct the economy where it will bolster businesses and the stock market, making sure the upper crust profits from this pandemic. That should make the GOP very happy given they are serving their masters while having the best medical coverage not obtainable by average Americans.
340
Republicans in Washington and members of The Congress (Sen McConnell et al) all enjoy free top-tier healthcare and retirement pensions paid for by US taxpayers. Yet, they won’t allow taxpayer money to actually be used for taxpayers for Medicare-for-all.
27
@Misplaced Modifier Please check your "facts", because members of congress do NOT receive free healthcare.
1
@Michael
Great comment. Now, when people get sick, die, go bankrupt, get foreclosed, the bankers can buy up their properties at super low interest rates, (as per Jared Kushner) For the one percent, a buying opportunity on the backs of oppressed.
This reminds me of Obama’s eight million foreclosures after 2008. Yes, Mr. "Hope and Change,” did the exact same thing. No help for those, "greedy homeowners," that had the audacity to buy too much house. Those people lived in a strict capitalist world, while the bankers and the one percent get the full socialist treatment.
9
When someone I know gets the virus I'll take a copy of this article to their bedside as a cure. Just kidding, of course.
No. This is just a cynical way to make money off of a medical emergency.
Color me disgusted.
488
@Concerned No kidding. The rate cut and Pence's prayer will feed the poor and cure conovarius!
22
Great. Take an interest rate drop and see the doctor in the morning. We are all crazy now.
314
@Padfoot this is the most perfect comment yet.
15
@Padfoot
This is Obama's fault. No, this is Voodoo Donuts' fault. No, this is Colonel Vindman's fault.
2
This should concern the markets, not reassure them…
176
@David
Well, the markets dropped three per cent, and the Dow was down about 800 points on the news. They might be concerned, all right.
2